Answered: QUESTION 2 Gas prices recently…

QUESTION 2 Gas prices recently decreased by 50%. In response, purchases of gasoline increased by 5%. The price elasticity of demand for gas is: 0-5 O-2 O-0.2 O-0.1

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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-0.06 The short-term demand for crude oil in Country A in 2008 can be approximated by q = f(p) = 1,952,082p where P represents the price of crude oil in dollars per barrel and q represents the per capita consumption of crude oil. Calculate and interpret the elasticity of demand when the price is $62 per barrel. The elasticity of demand for oil is (Type an integer or a decimal.)
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please help the answers I got were wrong!!!
The extended demand function of good X is: QDX = 1400 20 PX - 10 PY + 0.1 M where: QDX = quantity demanded of good X PX Price of good X PY = Price of related good Y (related in consumption to good X) M = Average consumer income. Fix the following variables: PX = 50 M = 10,000 Assume: PY changes from $50 to $80 What is the cross-price elasticity of the demand of good X with respect to PY [Use the arc elasticity formula.] a. -0.69 b. C. d. -0.87 Based on your answer to the previous question, goods X and Y are: b. 0.69 a. inelastic C. 0.87 d. complements inferior substitutes