Respuesta :
Answer:
This statement is true.
Explanation:
The concept of income elasticity measures a change in the demand because of change in the income of the consumer.
It is calculated as the ratio of change in demand to change in income.
A person was earning $10,000. Her income increased to $20,000.
Her consumption of macaroni decreased from 10 pounds to 5 pounds.
While her consumption of soy-burgers increased from 2 pounds to 4 pounds.
Income elasticity for macaroni
= [tex]\frac{\% \Delta Q}{\% \Delta Y}[/tex]
= [tex]\frac{\frac{5-10}{5} }{\frac{20,000 -10,000}{10,000} }[/tex]
=[tex]\frac{\frac{-5}{5} }{\frac{10,000}{10,000} }[/tex]
=[tex]\frac{-1}{1}[/tex]
= -1
Income elasticity for soy-burgers
= [tex]\frac{\% \Delta Q}{\% \Delta Y}[/tex]
= [tex]\frac{\frac{4-2}{2} }{\frac{20,000 -10,000}{10,000} }[/tex]
=[tex]\frac{\frac{2}{2} }{\frac{10,000}{10,000} }[/tex]
= 1
So, we see that macaroni has a negative income elasticity, its demand decreases with increase in income. Macaroni is an inferior good.
Soy-burgers sow a positive income elasticity. Their demand increases with increase in income. They are normal goods.
Soy-burgers is Normal good with Income elasticity of 1 : True . Macaroni is Inferior good with Income elasticity of -1 : False
Income Elasticity of Demand :
It shows responsive change in demand (consumption) due to change in Income.
Formula : % change in demand / % change in income = (dQ / dY) (Y / Q) , where dY, dQ are change in income & quantity and Y, Q are old income & old quantity
Normal Goods have demand directly related to Income. Inferior Goods have demand inversely related to Income.
So, Macaroni Income Elasticity of Demand = (-5 / 10000) (10000 / 10) = -0.5 As Income and Macaroni demand are inversely related, it is an Inferior Good.
Soy Burgers Income Elasticity of Demand = (2 / 10000) (10000 / 2) = +1 As Income and Soy burger demand are directly related, it is a Normal Good.
To learn more about Income Elasticity of Demand, https://brainly.com/question/3980051?referrer=searchResults
