Following table shows data for two markets A and B
|
Year
|
Average consumer Income
|
Price per unit of A good
|
Quantity of A good
|
Price per unit of B good
|
Quantity of B good
|
|
1
|
$30,000
|
$6
|
200
|
$50
|
80
|
|
2
|
$30,000
|
$7
|
180
|
$50
|
75
|
|
3
|
$30,000
|
$7
|
160
|
$60
|
70
|
|
4
|
$36,000
|
$7
|
180
|
$60
|
74
|
1. What is the price elasticity of demand for good A? Is the demand for this good elastic or inelastic?
2. What is the price elasticity of demand for good B? Is the demand for this good elastic or inelastic?
3. What is the income elasticity of demand for good A? Is this good normal or inferior?
4. What is the income elasticity of demand for good B? Is this good normal or inferior?
5. What is the cross price elasticity of demand of good A for a change in the price of good B? Comment on the relationship between good A and good B.