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1.Suppose quantity demanded for good z is given by QDz= 500 -50PZ+ 10Y -42PX, where x and z are two different goods and Y represents income. a.ls good x a normal or inferior good? b.ls good z a normal or inferior good? C.Are goods x and z complements or substitutes?

1.Suppose quantity demanded for good z is given by QDz= 500 -50PZ+ 10Y -42PX, where x and z are two different goods and Y represents income. a.ls good x a normal or inferior good? b.ls good z a normal or inferior good? C.Are goods x and z complements or substitutes?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1.Suppose quantity demanded for good z is given by QDz= 500 -50PZ+ 10Y -42PX, where x and z are two different goods and Y represents income. a.ls good x a normal or inferior good? b.ls good z a normal or inferior good? C.Are goods x and z complements or substitutes? d.Now suppose quantity supplied for good z is given by QSz =50PZ-400. Let's also assume Px= $1 and Y = 10. Find equilibrium price and quantity. e.ls the market equilibrium efficient? How do you know? 2. Suppose that when the firm charges a price of $24 per unit they sell 17 units. When they drop the price to $21 per unit they sell 18 units. If we assume the demand curve is linear and nothing else is changing, then find an equation for the demand curve
Transcribed Image Text:1.Suppose quantity demanded for good z is given by QDz= 500 -50PZ+ 10Y -42PX, where x and z are two different goods and Y represents income. a.ls good x a normal or inferior good? b.ls good z a normal or inferior good? C.Are goods x and z complements or substitutes? d.Now suppose quantity supplied for good z is given by QSz =50PZ-400. Let's also assume Px= $1 and Y = 10. Find equilibrium price and quantity. e.ls the market equilibrium efficient? How do you know? 2. Suppose that when the firm charges a price of $24 per unit they sell 17 units. When they drop the price to $21 per unit they sell 18 units. If we assume the demand curve is linear and nothing else is changing, then find an equation for the demand curve
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