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Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498Economics 1st Edition by Dean Karlan,Jonathan Morduch
Edition 1ISBN: 978-0073511498 Exercise 12
Suppose that when the average family income rises from $30,000 per year to $40,000 per year, the average family's purchases of toilet paper rise from 100 rolls to 105 rolls per year.
a. Calculate the income-elasticity of demand for toilet paper.
b. Is toilet paper a normal or an inferior good?
c. Is the demand for toilet paper income-elastic or income-inelastic?
a. Calculate the income-elasticity of demand for toilet paper.
b. Is toilet paper a normal or an inferior good?
c. Is the demand for toilet paper income-elastic or income-inelastic?
Explanation
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Given Information:
• Family income rise...
Economics 1st Edition by Dean Karlan,Jonathan Morduch
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