1.Suppose quantity demanded for good z isgiven by QDz= 500 -50PZ+ 10Y -42PX,where x and z are two different goods and Yrepresents 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 orsubstitutes?d.Now suppose quantity supplied for good zis given by QSz =50PZ-400.Let's also assume Px= $1 and Y = 10. Findequilibrium price and quantity.e.ls the market equilibrium efficient? How doyou know?2. Suppose that when the firm charges a priceof $24 per unit they sell 17 units. When theydrop the price to $21 per unit they sell 18units. If we assume the demand curve is linearand nothing else is changing, then find anequation for the demand curve

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Answered: 1.Suppose quantity demanded for good z…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

use the demand function below to answer the questions that follows Qdx = 3/4 - 1/3Px - 5Py + 2Pz - 2/10M a. identify which type of goods is Pz and explain it b. identify which type of good is M and explain it c. identify which type of good is Py and explain it
Answer the questions. Please draw graphs, instructions on word for how to draw the graph is not enough. Let X1 on the horizontal axis and X2 on the vertical axis. (a) Suppose two ordinary goods X1 and X2 are substitutes in consumption. Using BLs and ICs, graphically derive the demand curve for X1. Explain your graph.(b) If X2 is a Giffen good, how to derive the demand curve for X2?(c) Is the inferior good the same as the Giffen good? Why or why not?
3. If goods R and K have a cross elasticity of -3 and goods R and S have a cross elasticity of 5, then, what relationship exists between goods R and K? between R and S?
use the demand function below to answer the questions that follows Qdx = 3/4 - 1/3Px - 5Py + 2Pz - 2/10M a. identify which type of goods is Pz and explain it b. identify which type of good is M and explain it c. identify which type of good is Py and explain it
O X₁ V -IC, IC₂ IC, X₂ B X, X, B, B₂ (a) Are goods X and Y substitutes or complements? Explain. B₂ X (b) Let Y refer to all other goods. Is the demand for good X elastic or inelastic? Explain.
When a good or service faces an inelastic demand curve, a change in price will have a small effect on the quantity demanded. O True False
a. Describe according to demand theory why an inferior good or service you have consumed now or in the past is such. b. What do you expect would happen to your consumption of it when your income changed in either direction?
Which of the ff. is correct with regards to the demand curve? A. If the price of the good increases, the demand curve for the good will shift to the left B. If the price of the good increases, the consumers have the incentive to look for substitutes, thus, the quantity demanded and its price are inversely related C. Income of the consumers is written on the vertical axis D. Varying preferences of the consumers is reflected in the demand curve and is written on the horizontal axis
F9
1. Suppose that a representative individual has the following utility function U(x, y) = xªyß The price of good x is Php 40 and the price of good y is Php 20. The individual's income is Php 160. a. Calculate the income elasticity of demand for good x. Is good x a normal or an inferior good? b. Calculate the compensated cross-price elasticity of demand for good x with respect to the price of good y and interpret your result.
When income rises by 10%, the demand for Good A falls by 3%. From the above, we know Good A is O a complement a normal good O an inferior good O a substitute
If two goods are substitutes, a decline in the price of one will cause an increase in the demand for the other. A.True B.False

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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?