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Given the scenarios below, calculate the income elasticity of demand for that good using the midpoint method, determine whether the good is a normal good or an inferior good, and, if the good is a normal good, whether the good is income-elastic or income-inelastic. Specify answers to two decimal places.Income Elasticity of Demand Normal or Inferior Good? Sylvia works for Goldmann Sachs and has a salary of $104,000. After Christmas, she gets a raise to $109,500. As such, she decides to take an extra vacation each year, adding Spring Break to her list of 3 others: Christmas, Chinese New Years, and July 4th. Calculate for vacations.Blake eats two bags of potato chips a week. He is used to eating store brand chips since he only makes $9.50 an hour as a resident assistant. He obtains a summer internship as an economist for Bloomburg which pays $24.50 an hour and starts eating no store brand chips and only Lay's during the summer. Calculate for store brand chips.Becky really likes Macaroni Grill, but can only afford to eat out 4 times a year. Her boss only gives small raises, so this year she receives a 4% raise. She decides that a 4% raise is enough to warrant going out 1 more trip per year to Macaroni Grill. Calculate for restaurants.Lauren has to accept a pay cut to stay on as a fashion designer at Vogue from $85,000 a year to $77,000. Because of her pay cut, she buys 5% less t-shirts, skirts and jeans but still enough to refill her dresser. Calculate for clothing.
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