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3a. Suppose that a household has an income elasticity of demand for video games of 3.0....

3a. Suppose that a household has an income elasticity of demand for video games of 3.0. If the household experiences an income increase from $40,000 to $60,000 per year, how would consumption of video games change for this household? What does this tell us about how this household classifies video games?

3b. Suppose that a household has an income elasticity of demand of -1 for ramen noodles and the household currently consumes 105 boxes of ramen per year. If the household experiences an income increase $19,000 to $21,000 per year, how much ramen would the household consume? What does this tell us about how this household classifies ramen noodles?

3c. Suppose that another household has an income elasticity of demand 2 for ramen noodles and the household currently consumes 90 boxes of ramen per year. If the household experiences an income increase from $19,000 to $21,000 per year, how much ramen would the household consume? What does this tell us about how this household classifies ramen noodles?

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