Suppose that good 1 is normal and good 2 is inferior. Prove that the total effect on demand for good 1 of a marginal increase in the price of good 2 cannot exceed the total effect on demand for good 2 of a marginal increase in the price of good 1. That is, prove that ?х1 дрг = where, for each i = 1,2, zi denotes the Marshallian demand for good i and p; denotes the price of good i. Solution: By the Slutsky equation, VI əx1 дрг VI Əh₁ дрг Əh₂ др1 Əh₂ др1 Əh₂ < əx2 api' where the second line follows from Slutsky the fourth from inferiority of good 2. I2 X2 əxi dw дх1 dw Əx₂ əx2 I1 др1 dw др1 symmetry, the third from normality of good 1, and =

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Assume a demand equation for good 'x': where Q = 90.1pPy + 0.01pz + 0.0005Y; p= own price of the good Q = quantity demanded Py = price of a related good = $3 P₂ = price of a different related good = $200 Y = consumer income = $4,000/mo. The quantity demanded as a function of the price can be written: Q = 10-0.1p If the price of this good 'x' is equal to $46 per unit, what would be the quantity demanded? units. (enter your response rounded to one decimal place)

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A Gain from Trade occurs when a unit is sold for a price greater than the unit of the good is worth to a seller and, simultaneously, bought for a price less than the good is worth to a buyer. Consider the first 2 units of the good that would be sold in this market (the vertical red line on the graph). which answer choices are correct for the graph given bellow?

There are two consumers in the market for one good (with price P), A and B. Consumer A's inverse demand is given by P = -2QA+5 and consumer B's inverse demand is given by  P = -QB+10. At a price of 5, the total quantity demanded is ________ a) 0 b) 0.5 c) 1 d) 1.5 e) 2 f) 2.5 g) 5

please sir solve question 9

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The demand side of the market for Sprite is comprised of 2 people. These people are William and Owen. P represents the price of 1 gallon of Sprite, and Qd represents the quantity demanded of Sprite in gallons. William's demand for Sprite is modeled by the equation QdW = 10 - 2P Owen's inverse demand for Sprite is modeled by the equation P = 10 - 2QdO (Part I) With this information, draw the market demand graph. Please label the graph for slope values, intercepts, kinks, etc. (Part II) The market supply is modeled by P = Qs. Let's say that the government places a subsidy of $8 (s = 8). As a result, what is the market equilibrium with this intervention of the government (Q**, PD**, and PS**)? (Part III) Please draw the market demand and market supply on a new graph and indicate/label the market equilibrium with the government intervention through a subsidy. Label the graph for slopes, subsidy, equilibrium points, etc.