Increases by 120% - is correct
The coefficient on variable represents % change in X due to 1% change in that variable.
% increase in X = 10*12= 120%
QUESTION 19 Suppose you estimated the demand function of good Xin log-linear form and you obtained...
9. Suppose you calculate the price elasticity of demand for a certain good and you report that the elasticity 18 V.O. The fact that the elasticity is a positive number means that a. when the price of the good increases, the quantity demanded increases in response. b. demand for the good is elastic. c. you have dropped the minus sign and reported the absolute value of the elasticity d. the good has close substitutes and/or the good is a luxury....
Suppose the following is an estimated log-linear demand function: ln Q = 8.99 – 3.78 ln P – 1.77 ln M – 2.03 ln PR All parameter estimates are significant. 1) Is this good a normal or an inferior good? 2) Is this good a complement of or substitute for the related good? 3) What is the price elasticity of demand for this good? 4) What is the income elasticity of demand for this good?
You are the manager of Firm-X and must analyze an estimated log-linear demand function for your firm’s product (any product). Assume that the R-squared for the estimated regression is 0.80. So, Write out an estimated log-linear demand function that includes the relevant factors that affect the demand for your product (make up the estimated coefficients and their standard errors for the own price of the product and the other factors that affect the demand for your product). Below the estimated...
Q3. The general linear demand for good X is estimated to be Q = 25,000 - 80P-0.25M + 72P (6 Pts) where P is the price of good X, M is average income of consumers who buy good X, and P, is the price of related good R. The values of P, M, and P, are expected to be $100, $35,000, and $60, respectively. Use these values at this point on demand to make the following computations. a. Compute the...
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...
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...
15. Suppose demand, D, for a good is a linear function of its price per unit, P. When price is $20, demand 16. A certain firm posted an ad for a sales representative position paying S36,000 base salary plus a. What commission rate (as a percent of sales) must he earn to make $63,000 per year? is 100 units, and when price is $10, demand is 150 units. Find the demand function. commission. Based on his past experience, a salesman...
5. Suppose you have drawn a consumer's budget line for food and clothing, with food on the x- axis. Which of the following events would make the budget line steeper? a) Income increases. b) Price of food increases. c) Price of clothing increases. d) None of the above. 6. A downward sloping price-consumption curve indicates that a) The two goods are complements. b) The two goods are substitutes. c) The two goods are independent of each other. d) The two...
1. Consumer’s utility function is: U (X,Y) = 10X + Y. Consumer’s income M is 40 euros, the price per unit of good X (i.e. Px ) is 5 euros and the price per unit of good Y (i.e. Py) is 1 euro. a) What is the marginal utility of good X (MUx) for the consumer? ( Answer: MUx = 10) b) What is the marginal utility of good Y (MUy) for the consumer? ( Answer: MUy = 1) c)...
The following graph shows the monthly demand functions for a particular good such as a particular kind of pizza pertaining to two consumers; Mrs. Brown and Mr. Blue. Mr. Blue does not care that much for this kind of pizza. Mrs. Brown, on the other hand, loves this pizza and believes that it is the best invention in the history of humankind. Currently the price of this pizza is $14 per unit and they are both buying 10 pizzas per...