The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income.Table 6.2

-Refer to Table 6.2. What is the income elasticity of demand for automobiles?
A)0.5
B)0.35
C)2
D)0.2
E)Zero

Question

The table below shows the quantities of automobiles, margarine, and coffee purchased by Ted at different levels of income.Table 6.2
 
-Refer to Table 6.2. What is the income elasticity of demand for automobiles?
A)0.5 
B)0.35 
C)2 
D)0.2 
E)Zero

Quizplus · Accepted Answer

The income elasticity of demand for automobiles is 0.5, which means that a 1% increase in income will lead to a 0.5% increase in the quantity of automobiles demanded.

The Table Below Shows the Quantities of Automobiles, Margarine, and Coffee