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1. Consider a service that you buy frequently. (a) Suppose that the price is 5% lower. How much more would you buy each year? (b)

1. Consider a service that you buy frequently. (a) Suppose that the price is 5% lower. How much more would you buy each year? (b) Calculate the own-price elasticity of your demand.

2. Consider a good that you buy frequently. (a) Suppose that your income is 10% higher. How much more would you buy each year? (b) Calculate the income elasticity of your demand.

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