1. Based on the following table which indicates expenditure of the household on a commodity answer the questions that follow (The price of the good is Br.10)
A) Calculate income elasticity of demand, if income increases from Br.10, 000 to Br. 20,000 and if income increases from Br.40, 000 to Br. 50,000. (3 point)
B) Is this a normal or an inferior or a luxury good? Justify. (3 point)
C) Does the proportion of household income spent on this good increase or decrease as income increases? Why? (2 point)