Calculate the numerical value of income elasticity, ei, in each of the following

situations using the formula found in the chapter. In each case, identify whether

the relevant product is normal or inferior.

a. Purchases of automobiles rise from 2 million to 3 million when average con-

sumer incomes per year increase from $50 000 to $70 000.

b. A rise in average consumer incomes per year from $30 000 to $40 000

causes the quantity demanded of powdered milk to fall from 100 000 to

50 000 kilograms.

c. A fall in average consumer incomes per month from $3000 to $2800 leads to

a drop in visits to massage therapists from 120 000 to 100 000.