Question

You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired and your income drastically increased. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to but fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles,

Answer 1

The reaction to an increase in income when it comes to purchasing Ramen noodles can vary based on personal preferences and income elasticity of demand.

Step-by-step explanation:

The subject of this question is Economics and it is suitable for High School level students. When looking at income elasticity of demand for Ramen noodles, the reaction to a rise in income will vary based on personal preferences. It is possible for both you and your roommate to choose different reactions, such as you buying even more Ramen noodles while your roommate chooses to buy fewer in favor of other foods. The key factor in determining the reaction is the income elasticity of demand, which measures how the quantity demanded responds to changes in income.