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When Her Income Increases from $10,000 to $20,000, as Shown

Question 87

Multiple Choice

When her income increases from $10,000 to $20,000, as shown in the accompanying table, Marguerite increases the quantity demanded from 3 to 7 rolls at a price of $3. From the midpoint method, income elasticity of demand for sushi is:  Price (per  roll)   Quantity  Demanded  (income= $10,000/ year)   Quantity  Demanded  (income= $20,000/year) $159$248$337$426$515\begin{array} { | l | c | c | } \hline \begin{array} { l } \text { Price (per } \\\text { roll) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (income= } \\\$ 10,000 / \text { year) }\end{array} & \begin{array} { l } \text { Quantity } \\\text { Demanded } \\\text { (income= } \\\mathbf { \$ 2 0 , 0 0 0 / y e a r ) }\end{array} \\\hline \$ 1 & 5 & 9 \\\hline \$ 2 & 4 & 8 \\\hline \$ 3 & 3 & 7 \\\hline \$ 4 & 2 & 6 \\\hline \$ 5 & 1 & 5 \\\hline\end{array}


A) 0.67.
B) 1.20.
C) 1.33.
D) 0.83.
E) 0.50.

Correct Answer:

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