Problem
Ann consumes five goods. The prices of all goods are fixed. The price of good x is px. She spends 25 percent of her income on good x, regardless of the size of her income. a) Show that her income elasticity of demand of good x is the same for any level of income, and determine its value. b) Would the value of the income elasticity of demand for x be different if Ann always spends 60 percent of her income on good x?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.