question\nas the average hourly wage increases from $16 per hour to $19 per hour, the quantity demanded of…

question\nas the average hourly wage increases from $16 per hour to $19 per hour, the quantity demanded of lawn - mowers increases from 7,000 to 11,500. what is the income elasticity of demand for lawn - mowers?\nround your answer to the nearest hundredth. your answer may be a positive or negative number.\nprovide your answer below.

question\nas the average hourly wage increases from $16 per hour to $19 per hour, the quantity demanded of lawn - mowers increases from 7,000 to 11,500. what is the income elasticity of demand for lawn - mowers?\nround your answer to the nearest hundredth. your answer may be a positive or negative number.\nprovide your answer below.

Answer

Explanation:

Step1: Calculate the percentage change in quantity demanded

The formula for percentage change in quantity demanded is $\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}\times100%$. Here, $Q_1 = 7000$ and $Q_2=11500$. $\frac{11500 - 7000}{\frac{11500 + 7000}{2}}\times100%=\frac{4500}{\frac{18500}{2}}\times100%=\frac{4500}{9250}\times100%\approx48.65%$

Step2: Calculate the percentage change in income

The formula for percentage change in income is $\frac{I_2 - I_1}{\frac{I_2+I_1}{2}}\times100%$. Here, $I_1 = 16$ and $I_2 = 19$. $\frac{19 - 16}{\frac{19+16}{2}}\times100%=\frac{3}{\frac{35}{2}}\times100%=\frac{3}{17.5}\times100%\approx17.14%$

Step3: Calculate income - elasticity of demand

The formula for income - elasticity of demand ($E_I$) is $E_I=\frac{\text{Percentage change in quantity demanded}}{\text{Percentage change in income}}$. $E_I=\frac{48.65%}{17.14%}\approx2.84$

Answer:

$2.84$