7. Based on the following table which indicates expenditure of the household on a commodity, answer the questions that follow ( The price of the good is Br.10 ) Income ( Br. / month) Quantity Demanded ( units / month ) 10,000 50 20,000 60 30,000 70 40,000 80 50,000 90 A) Calculate income elasticity of demand, if income increases from Br.10, 000 to Br. 20,000 and if income increases from Br.40, 000 to Br. 50,000. B) Is this a normal or an inferior or a luxury good? Justify. C) Does the proportion of household income spent on this good increase or decrease as income increases? .Why?

Assume that a local bank sells two services, checking accounts and atm card services. the bank’s only two customers are mr. donethat and ms. beenthere. mr. donethat is willing to pay $8 a month for the bank to service his checking account and $2 a month for unlimited use of his atm card. ms. beenthere is willing to pay only $5 for a checking account, but is willing to pay $9 for unlimited use of her atm card. assume that the bank can provide each of these services at zero marginal cost. refer to scenario 17-5. if the bank is unable to use tying, what is the profit-maximizing price to charge for a checking account