Question

suppose that demand's elasticity for cars in USA=2.5 and in UK=3
If in the next year the incomes of USA grow with 2% and in UK with 1% wht will be the effect in Qd in both countries?

Answer 1

See as the income level of both the countries is increasing then people will have more money to spend that is their desire will get converted into demand ( with extra amount to spend). Thus, such people who do not possess car will purchase car and those who already possess car will try to buy cars which will be better than the car they possess.

Answer 2

my teacher did smth like i didn't get...do these show the increase of Qd of USA and UK?