A consumer's weekly income is $300, and the consumer buys 5 bars of chocolate per week. When weekly income increases to $330, the consumer buys 6 bars per week. The income elasticity of demand for chocolate by this consumer is about

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Quizplus · Accepted Answer

Income elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in income. The percentage change in quantity demanded is (6-5)/5 = 0.2, and the percentage change in income is (330-300)/300 = 0.1. Thus, the income elasticity is 0.2/0.1 = 2.

A Consumer's Weekly Income Is $300, and the Consumer Buys