Refer to the Accompanying Graph

question 140

Essay

Refer to the accompanying graph.

a.Calculate the income elasticity of demand for televisions at a price of $550.
b.Are televisions a luxury good,necessity good,or inferior good? Explain.
c.Name a good for which consumption would likely fall when there is an increase in income from $20,000 to $30,000.Explain your reasoning.

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Definitions:

Lactose

A disaccharide sugar composed of glucose and galactose, found primarily in milk and dairy products.

Lactase

An enzyme that catalyzes the hydrolysis of lactose into glucose and galactose.

Monosaccharides

Simple sugars that constitute the building blocks of more complex carbohydrates.

Hydrolysis

A chemical reaction in which water is used to break down the bonds of a particular substance, such as in the digestion of nutrients.