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Suppose a consumer has demand function given by: (P.P.m) = 100 -...
The demand function for good X is as follows: X= 25 + 5Py+ 5B-2PX A. What...
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. Ms. Rada has a utility function u(x,y) = xy and an income of $250. Suppose...
1. Ms. Rada has a utility function u(x,y) = xy and an income of $250. Suppose the price of good y is $4 a unit. Find the consumer’s demand function for good x. (a.) x* = 125/(4Px) (b.) x* = 125/Px (c.) x* = 250/Px (d.) x* = 250/(0.5Px) 2. A consumer has a demand curve of X = 550 – 2.5Px– 10M, where Pxis the price of good X, and M is income. In this case, good X is...
Suppose that the demand and supply functions for good X are Qd = 56 – 2PX...
Suppose that the demand and supply functions for good X are Qd = 56 – 2PX + 0.01M +7PR Qs = -600 + 10PX Where PX is the sales price of good X, M is average consumer income, PR is the price of a related good. Is good X a normal or inferior good? Are good X and R complements of substitutes? Explain? Suppose M = $50,000 and PR = $20 What is the direct demand function for good X?...
A consumer has the utility function over goods X and Y, U(X; Y) = X1/3Y1/2 Let...
A consumer has the utility function over goods X and Y, U(X; Y) = X1/3Y1/2 Let the price of good x be given by Px, let the price of good y be given by Py, and let income be given by I. Derive the consumer’s generalized demand function for good X. Solve for the Marshallian Demand for X and Y using Px, and Py (there are no numbers—use the notation). c. Is good Y normal or inferior? Explain precisely.
1 Elasticity This problem continues on from the previous homework. Consider the market for good X....
1 Elasticity This problem continues on from the previous homework. Consider the market for good X. The demand function is and the supply function is Px, Py, and Pz are the prices of goods X, Y, and Z. M is the average consumer income Suppose market research determines that M 105, Py 20, and Pz 10. 1.a Caleulate the cross-price clasticities of demand with respect to good Y and good Z at the market cquilibrium. Are goods Y and Z...
1. Suppose a consumer has the utility function over goods x and y u(x, y) =...
1. Suppose a consumer has the utility function over goods x and y u(x, y) = 3x}}} (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, Py,m). Show all of your work and circle your final...
1. (34 points) Consider the demand function for good X: x= (A P3 - MP,Px M...
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, =...
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x{y}...
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...
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x3...
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x3 yž (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, Py,m). Show all of your work and circle your final...
Unsolvable question. please help
a. Consider the following demand functionQx= 50 - 2Px + 4Py- 41Suppose that price of good X is 5, price of good y is 2.5, and income is 10. Find the following; i. Own price elasticity of demand. [2 Marks] ii. Cross price elasticity of demand. [2 Marks iii. Are X and Y substitute or complements? Explain. [2 Marks] iv. Income elasticity of demand for good X. [2 Marks] v. Is X a normal good or inferior good? Explain. ...
1 Elasticity This problem continues on from the previous homework. Consider the market for good X. The demand function is and the supply function is Px, Py, and Pz are the prices of goods X, Y, and Z. M is the average consumer income Suppose market research determines that M 105, Py 20, and Pz 10. 1.a Caleulate the cross-price clasticities of demand with respect to good Y and good Z at the market cquilibrium. Are goods Y and Z...
1. Suppose a consumer has the utility function over goods x and y u(x, y) = 3x}}} (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, Py,m). Show all of your work and circle your final...
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, =...
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...
1. Suppose a consumer has the utility function over goods x and y u(x,y) = 3x3 yž (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, Py,m). Show all of your work and circle your final...
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