When Sven graduated from college and got a job, his income rose from $15,000 to $60,000. His consumption habits also changed drastically. Use the following information to determine his income elasticity of demand and state whether the good is normal, inferior, or a luxury good. Use the midpoint rule in your calculations.
a. Ramen noodles – consumption falls from 7 packs a week to zero.
b. Neckties – consumption rises from 1 per year to 11 per year.
c. Burrito at Sven’s favorite burrito place – consumption rises from 1 per week to 2 per week.