Calculate the elasticity for the following questions (USING THE MIDPOINT (AVERAGE) FORMULA) and indicate if the goods are:

1. Inferior, 2. Normal, 3. Complements, or 4. Substitutes

(Please Include The Negative signs in your answers where appropriate and calculate to 2 decimals)

A. The price of gasoline increases from 20 per barrel to 36 per barrel and as a result, the demand per month for new cars changes from 600 to 200.

Part 1: The elasticity is Part 2: These goods are (answer using numbers, 1-4)

B. As a result of a change in income from 1,525 to 3,825 per month, the consumption of good X changes from 100 to 225 units. Part 3: The elasticity is Part 4: Good X is a(an) (answer using numbers, 1-4) C. As a result of a decrease in the price of good Y from 37 to 14 the demand for good X changes from 150 to 450 units. Part 5: The elasticity is Part 6: These goods are(answer using numbers, 1-4) D. As a result of an economic boom in Calgary, the average income increases from 2,800 to 6,800 per month and as a result the demand for new houses increases from 120 to 260 units. Part 7: The elasticity is Part 8: New houses are a(an) (answer using numbers, 1-4)

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