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 lawnmowers increases from 7,000 to 11,500. what is the income elasticity of demand for lawnmowers?\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 lawnmowers increases from 7,000 to 11,500. what is the income elasticity of demand for lawnmowers?\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 $\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2}}\times100%$, where $Q_1 = 7000$ 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 $\frac{I_2 - I_1}{\frac{I_2+I_1}{2}}\times100%$, where $I_1 = 16$ 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 the 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:

$2.84$