Business, 31.07.2019 02:30 kyleighott

During a recession, median income falls by 15%. if the demand for grapes falls by 12%, grapes are a(n) good with an income elasticity of demand of normal; -0.8 inferior; 0.8 normal; 0.8 inferior; -0.8

Answers: 1

Show answers

Answers

During a recession, median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8.

To find the income elasticity of demand follow this equation:
income elasticity of demand = change in demand/change of income
income elasticity of demand = 0.12/0.15 = 0.8

Grapes are a normal good because the income elasticity of demand is greater than zero.

Answer from: lyndamahe0

During a recession, the median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8. This implies the correct answer is 0.8 normal.

Income elasticity demand measures how some factors affect how consumers demand a product.

Some of the factors that could affect the demand for a product include price and income.

Further Explanation

Income elasticity demand is meant to reveal the extent to which the rise in consumer’s income affects the demand for a particular product.

Income elasticity can be expressed as:

Income Elasticity of Demand (YED) = % change in quantity demanded / % change in income

From the given question:

Change in demand = 0.12 Change of income = 0.15

If you substitute the value, then you have:

Income elasticity of demand = 0.12 / 0.15

= 0.8

Normal goods are accompanied by positive income elasticity of demand. This also means that more quantity is demanded as the income of the consumer increases.

However, there are five types of income elasticity of demand and these include

High Unitary LowZero Negative

Therefore, during a recession, the median income falls by 15%. If the demand for grapes falls by 12%, grapes are a normal good with an income elasticity of demand of 0.8

LEARN MORE:

During a recession, median income falls by 15%. if the demand for grapes falls by 12% If the income elasticity of a good is 0.8, what do we know about the good

KEYWORDS:

recessiongrapesnormal goodincome elasticity of demand0.8 normal

Answer from: Quest

Iwould say e managed social media account . i won’t take my answer because it might be wrong

Answer from: Quest

borrow money from the government then pay the government back 5k

Another question on Business

Business, 22.06.2019 09:50

The returns on the common stock of maynard cosmetic specialties are quite cyclical. in a boom economy, the stock is expected to return 22 percent in comparison to 9 percent in a normal economy and a negative 14 percent in a recessionary period. the probability of a recession is 35 percent while the probability of a boom is 10 percent. what is the standard deviation of the returns on this stock?

Answers: 2

Answer

Business, 22.06.2019 11:00

The following transactions occurred during july: received $1,000 cash for services provided to a customer during july. received $4,000 cash investment from bob johnson, the owner of the business received $850 from a customer in partial payment of his account receivable which arose from sales in june. provided services to a customer on credit, $475. borrowed $7,000 from the bank by signing a promissory note. received $1,350 cash from a customer for services to be rendered next year. what was the amount of revenue for july?

Answers: 1

Answer

Business, 22.06.2019 13:40

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.

Answers: 1

Answer

Business, 22.06.2019 16:20

Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. the portfolio's beta is 1.25. now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.55. what would the portfolio's new beta be? do not round your intermediate calculations.

Answers: 2

Answer

You know the right answer?

During a recession, median income falls by 15%. if the demand for grapes falls by 12%, grapes are a(...

Questions