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John has long eaten a serving of instant noodles every day. When his salary is increased from SEK 20,000 to SEK 22,000 a month, he
John has long eaten a serving of instant noodles every day. When his salary is increased from SEK 20,000 to SEK 22,000 a month, he switches to eating instant noodles every other day instead.
Define and explain the concept of income elasticity and calculate John's income elasticity for instant noodles.
What kind of item are instant noodles for John?
Show the consequences of the wage increase on John's demand for instant noodles in a diagram where you also draw the supply of instant noodles (assume everything else being equal).
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