Arc Income of Elasticity

Two years ago, Burt earned $35,000 in income and used part of his income to purchase 7 movie tickets throughout the year. Last year, Burt earned $40,000 in income and bought 5 movie tickets throughout the year. Assume prices did not change across these years (0% inflation) and tax rates were not changed (this is a real increase in income and a real decrease in the number of movie tickets purchased). Use the income elasticity to gain insight about Burt's opinion of going to the movies.

1. CALCULATE (Q2+Q1)2(Q2Q1). Show your work.

2. Calculate (I2+I1)2(I2I1). Show your work.

Based on your work so far, what isEI ? Show the work remaining that is required for this step. Does Burt consider movies to be a necessity, luxury, or inferior consumption item? How did you determine this?