Q1: The following table shows average income of buyers, the price of good G, the price...

Q1: The following table shows average income of buyers, the price of good G, the price of good H, the quantity demanded (Q^D) of good G and the quantity demanded (Q^D) of good H for 5 periods. Use the information in the table to answer the following questions. Do not round your answers early because your final results will be less accurate.

Period	Average Income	Price of Good G	Price of Good H	Q^D of Good G	Q^D of Good H
1	$68,000	$7	$13	1310 units	6280 units
2	$62,000	$5	$13	2010 units	6140 units
3	$62,000	$5	$10	2100 units	6500 units
4	$62,000	$7	$10	1700 units	6340 units
5	$68,000	$5	$10	1800 units	6800 units

a) What does the income elasticity of demand for good H equal (to 3 decimal places)? Show clearly how you arrived at your answer. If Fulton has to figure out how you arrived at your answer, marks will be deducted. 3 marks.

b) What does the cross-price elasticity of demand for good G equal (to 3 decimal places)? Show clearly how you arrived at your answer. If Fulton has to figure out how you arrived at your answer, marks will be deducted. 3 marks.

Solutions

Expert Solution

Please give ratings it will be appreciable, for any query please comment, Thank you

Solution,

remaining Period than 2 & 3 the price of good H does not change. so cross-price elasticity only calculate in between period 2 & 3.

Rahul Sunny answered 1 year ago

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