Calculate and Explain the Use of Income Elasticity

Essay

Calculate and explain the use of income elasticity.
-Look at each of the following pairs and discuss which component has a higher price and income elasticity. Briefly explain your answer.
a. movies/taxi cabs
b. tobacco/gasoline
c. electricity/water
d. mobile phone service/clothing
e. intercity busses/doctor's services
Both are necessity goods. Doctor's services are likely to be more inelastic in most cases.