Eric's income increased from $40,000 to $50,000 per year.Eric's consumption of tickets to pro football games increased from two to four per year.By the midpoint formula,his income elasticity of demand for pro football game tickets is equal to _____,and football game tickets are _____ goods.
A)-0.33;inferior
B)+0.67;normal
C)-3;inferior
D)+3;normal

Question

Quizplus · Accepted Answer

The income elasticity of demand is calculated using the midpoint formula: [(Q2 - Q1) / ((Q2 + Q1) / 2)] / [(I2 - I1) / ((I2 + I1) / 2)]. Substituting the values: [(4 - 2) / (4 + 2) / 2] / [(50000 - 40000) / (50000 + 40000) / 2] = 3. Since the elasticity is positive and greater than 1, tickets are normal goods.

Eric's Income Increased from $40,000 to $50,000 Per Year