Question 5 1 pts Find the formula for the demand function for a (x as a...
The demand function for good X is as follows: X= 25 + 5Py + 5B -2Px A. What is the slope of this demand curve? B. If Px=10, Py=3, and B= 10 derive the: a. Own demand elasticity at these values b. Cross elasticity at these values c. Income elasticity at these values. C. Is good X elastic or inelastic at these values for income, price of good Y and price of good X? Is good Y a substitute or complementary good? And, is good X an...
1. (34 points) Consider the demand function for good X: x= (A P3 - MP,Px M = income M= 1 Px = 1 Py = 3 a) (7 points) Calculate the value of own-price elasticity of good X, ε. b) (9 points) Suppose ε = -0.9. Explain what this tells you. c) (7 points) Calculate the value of cross-price elasticity (the elasticity of good X with respect to the price of good Y), Exp... d) (11 points) Suppose Exp, =...
Suppose your utility function is U (x, y) = 2 ln(2) + 4y c) Given PX - 1. Py = 2, and M =5. Find the elasticity of demand (own-price elasticity) for good x -- is good x ordinary or Giffen? Edit View Insert Format Tools Table 12pt Paragraph B I VART :
4. Assume that the demand for a product X is heavily influenced by the price of another product Y (Py), and the income of consumers (I). The cross-price elasticity of X with respect to Y is ex 1.25, and the income elasticity is e 2. (1) Are X and Y complements or substitutes? Why? (2) Is X a normal or inferior good? (3) Suppose now Py decreases by 5%, and consumer income decreases by 1%. will the quantity demanded of...
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x{y} (a) Setup the utility maximization problem for this consumer using the general budget con- straint. (2 points) (b) Will the constraint be active/binding? Is the sufficient condition for interior solution satisfied? Prove your answers. (4 points) (c) Solve the utility maximization problem for the Marshallian demand equations x* (Px. Py,m) and y* (Px.p.m). Show all of your work and circle your final answers. (7...
A3 Own Price Elasticity Question 1: The demand for Wanderlust Travel Services (good X) is estimated to be Qx = 22000-2.5Px + 4PY-1 M 1 .5Ax. Where Qx is the quantity of good X, Px is the price of good X, Py is the price of good Y, M is consumer income, and Ax is the amount of advertising spent on X. Suppose the price of good X is $450, the price of good Y is $40, the company uses...
Does someone know how to solve this please been answered before but
been wrong and confusing can you please help thanks!! PART B AND
PART D please
1. Consider the utility function u(x, y) = ¼ In x + ½ In y for goods x and y. (a) At an income level of M, and market prices for x and y of px and p, respectively, set out the consumer optimisation problem and form the Lagrangian. Using this, find the...
Assume that the market demand for Good X is given as QB = 3 + 6P31 +0.21 + 4P70.5, where Px = the price of Good X per unit, I = average income per period, and Py = the price of Good Y per unit. Suppose that Px = $2, I = $10, and Py=$4. What is the own-price elasticity of demand (nx) and what is the cross-price elasticity of demand (NXY)? The own-price elasticity of demand = -0.3 and...
Consider the following demand function for good 'X': Q = 9 -0.1px - Py + 0.01p2 +0.001Y, where Own price, Px = $120 Quantity demanded = 13.75 Price of a related good, Py = $6 Price of a related good, Pz = $275 Consumer income, Y = $20,000 The income elasticity of demand, s, when equilibrium quantity is 13.75 units and income is $20,000 is equal to : (Enter a numeric response using a real number rounded to three decimal...
2. The annual market own-price demand function for good X is estimated as X=142-5PX-1 -3.5 Py where X quantity demanded of good X in units/year Px = price of good X in dollars/unit per capita income in dollarsyear Py price of good Y in dollars/unit a) Calculate the market (own-price) demand curve when I = 25 and Py =12 b) Using your results from part a), calculate the quantity of good X demanded in the market when PX-10 c) Calculate...