Question

You landed your first job in college as an economic analyst. Your starting salary increased by 250. What's the income elasticity for meals at a restaurant?

A) 0
B) 1
C) 250
D) It cannot be determined from the given information

Answer 1

The income elasticity for meals at a restaurant cannot be determined from the given information.

Step-by-step explanation:

The income elasticity for meals at a restaurant cannot be determined from the given information. Income elasticity measures the responsiveness of the quantity demanded of a good to a change in income. In this case, we are given that the starting salary increased by $250, but we do not have information about how it affects the demand for meals at a restaurant. We would need more data such as the change in price or quantity demanded of restaurant meals to calculate the income elasticity.