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To solve this problem, we need to calculate Blake's income elasticity of demand for generic potato chips using the midpoint (or arc elasticity) formula. The formula for income elasticity of demand is:

\[
\text{Income Elasticity of Demand} = \frac{\%\text{ Change in Quantity Demanded}}{\%\text{ Change in Income}}
\]

### Step-by-Step Solution:

1. **Identify the change in income:**
   - Initial income (hourly wage): $ 8 $ dollars
   - New income (hourly wage): $ 15 $ dollars
   - Midpoint income: $ \frac{8 + 15}{2} = 11.5 $ dollars

   \[
   \%\text{ Change in Income} = \frac{15 - 8}{11.5} = \frac{7}{11.5} \approx 0.6087 \quad \text{(or 60.87%)}
   \]

2. **Identify the change in quantity demanded:**
   - Initial quantity of generic chips: $ 2 $ bags
   - New quantity of generic chips: $ 0 $ bags (since he stopped eating them)
   - Midpoint quantity: $ \frac{2 + 0}{2} = 1 $ bag

   \[
   \%\text{ Change in Quantity Demanded} = \frac{0 - 2}{1} = -2 \quad \text{(or -200%)}
   \]

3. **Calculate the income elasticity of demand:**

   \[
   \text{Income Elasticity of Demand} = \frac{-200\%}{60.87\%} \approx -3.29
   \]

### Conclusion:
- Blake’s income elasticity of demand for generic potato chips is approximately **-3.29** (rounded to two decimal places).
- Since the elasticity is negative and greater than 1 in absolute value, this good can be classified as an **inferior good** (meaning demand decreases as income rises).

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Would you like further details or have any questions?

### Follow-up Questions:
1. What does a negative income elasticity of demand indicate about a product?
2. How would the result change if Blake only reduced his consumption instead of stopping entirely?
3. What is the difference between normal and inferior goods in terms of income elasticity?
4. How does the midpoint method improve accuracy in elasticity calculations?
5. Why is it important to round answers in economic calculations?

**Tip:** Using the midpoint method helps to avoid discrepancies when calculating elasticity between two different points.

Blake eats two bags of generic potato chips each day. When his hourly wage increases from $8 to $15, he stops eating generic chips and instead eats a name-brand potato chip. Use the midpoint method to calculate Blake's income elasticity of demand for generic potato chips. Round your answer to two decimal places.

Learn how to calculate Blake's income elasticity of demand for generic potato chips using the midpoint method. This problem demonstrates how changes in income affect the demand for goods, with a focus on inferior goods. Suitable for high school students studying economics.

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