If Cassandra bought 12 blouses last year when her income was $46,000 and she buys 14 blouses this year when her income is $52,000, then her income elasticity of demand for blouses is approximately a.-2.52. ob. + 1.26 c - 0.80. d. - 1.26. e. + 0.80.

b. + 1.26

Explanation:

The computation of the income elasticity of demand is shown below:

= (Percentage Change in quantity demanded) : (Percentage Change in income)

= (change in quantity demanded : average of quantity demanded) : (change in income : average of income)

where,

Change in quantity demanded would be

= Q2 - Q1

= 14 blouses - 12 blouses

= 2 blouses

And, average of quantity demanded would be

= (12 + 14) : 2

= 13

Change in income would be

= $52,000 - $46,000

= $6,000

And, average of income would be

= ($52,000 + $46,000) : 2

= 49,000

So, after solving this, the income elasticity of demand is + 1.26