Ariya likes to play golf. The number of times per year that she plays depends on the price of playing a round of golf, Ariya’s income, and the price of other types of entertainment—in particular, the price of going to a movie instead of playing golf. The three demand schedules in the following table show how many rounds of golf per year Ariya will demand at each price per round under three different scenarios. In scenario D₁, Ariya’s income is $50,000 per year and movies cost $9 each. In scenario D₂, Ariya’s income is also $50,000 per year, but the price of seeing a movie rises to $11. And in scenario D₃, Ariya’s income goes up to $70,000 per year, while movies cost $11.

a. Using the data under D₁ and D₂, calculate the cross elasticity of Ariya’s demand for golf at all three prices. (To do so, apply the midpoint approach to the cross elasticity of demand.) Is the cross elasticity the same at all three prices?
Are movies and golf substitute goods, complementary goods, or independent goods? Explain.

b. Using the data under D₂ and D₃, calculate the income elasticity of Ariya’s demand for golf at all three prices. (To do so, apply the midpoint approach to the income elasticity of demand.) Is the income elasticity the same at all three prices? Is golf an inferior good? Explain.

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Price D Quantity Demanded D Da $50 15 10 15 35 25 15 30 20 20 40 20 50