1. Given the above demand curve, how many of good X will consumer purchase when PX...
1. Given the above demand curve, how many of good X will consumer purchase when PX is $100 a unit, PY is $50 a unit, and M is $25,000?
2. Your research department estimates that the supply function for televisions is given by:
QXS = 5,000 + 5PX -10PR – 2PW
When PX is $800, PR is $200, and PW is $2500, how many television sets are produced?
3. Suppose the cross-price elasticity of demand between Coke and Pepsi is 0.5. If the price of Pepsi is projected to go up 10%, how much will the demand for Coke change?
Homework Answers
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1. Given the above demand curve, how many of good X
will consumer purchase when PX...
Your research department estimates that the supply function for televisions is given by: QXS = 5,000...
Your research department estimates that the supply function for televisions is given by: QXS = 5,000 + 5PX -10PR – 2PW When PX is $500, PR is $100, PW is $2500, how many television sets are produced?
Given the above demand curve, how many of good X will consumer purchase when PX is...
Given the above demand curve, how many of good X will consumer purchase when PX is $100 a unit, PY is $50 a unit, and M is $25,000?
The market for good X consists of 2 consumers. Consumer 1’s demand for good X is:...
The market for good X consists of 2 consumers. Consumer 1’s demand for good X is: X1 = 15 - 3PX + 0.5PY + .02 *I1 Consumer 2's demand for X is: X2 = 10 - PX + 0.2PY + .01*I2 I1 and I2 are incomes of consumer 1 and 2, respectively. PX and PY are the prices of goods X and Y, respectively. a. What is the equation for the market demand function for X? Graph the two individual...
Assume that the market demand for Good X is given as QB = 3 + 6P31...
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...
suppose demand for good X is given by QX = –5PX + 10PY + 1.25I. Suppose...
suppose demand for good X is given by QX = –5PX + 10PY + 1.25I. Suppose PY=$1 and I=$12. What is the equation for the own-price demand curve? What is the slope of the own-price demand curve? Calculate the price elasticity of demand if PX = $2. Interpret your result
2. The annual market own-price demand function for good X is estimated as X=142-5PX-1 -3.5 Py...
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...
1. When a consumer has a Cobb-Douglas utility function given by u(x, y) = xa yb , their demand for good x is given by x∗...
1. When a consumer has a Cobb-Douglas utility function given by u(x, y) = xa yb , their demand for good x is given by x∗ = m/Px (a/a+b) where m is income and Px is the price of good x. Using this demand function, find the formula for this consumer’s price elasticity of demand. Interpret it in words.
Elasticity The demand for good X is given by: QDX = 200 – 10 PX. a....
Elasticity The demand for good X is given by: QDX = 200 – 10 PX. a. Calculate the price elasticity of demand when PX = $10. b. At what price, if any, the demand is unitary elastic? c. Calculate the price elasticity of demand when PX = $5. d. According to your answer in “c” what will happen to total revenue as we raise the price? e. Calculate the change in TR as PX from $5 to $8.
The demand for good X is given by QXd = 6,000 - (1/2)PX - PY +...
The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. a. Indicate whether goods Y and Z are substitutes or complements for good X b. Is X an inferior or a normal good? c. How many units of good X...
Robert’s demand curve for good X is given by the equation X = 100 - 2PX....
Robert’s demand curve for good X is given by the equation X = 100 - 2PX. (5 points) a. What is the elasticity of demand at the point X=20, PX =40? (5 points) b. If price falls from PX =40 to PY =35, what happens to total spending for X and what does this imply about the elasticity of demand? (5 points) c. Compute the elasticity to verify the answer.
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...
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...
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