Suppose we have a market with 200 individuals withpreferences over two goods, x and y.1. Consider that all 200 individuals have the utilityfunction U = x²/3y¹/3 and that each individualhas the same income and is subject to the sameprices. Calculate the market demand for x as afunction of income and prices.2. Find the own price elasticity of demand for goodx. Is the elasticity constant or is it changing atdifferent values of P?3. Suppose now that we know m = 135, P = 3,4. What is the market demand for x?This should be a number.and Py4. Consider now that 100 individuals (type A) havethe utility function U = x²/³y¹/³ and the other100 (type B) have the utility functionU = x¹/3y2/3. Each individual still has the same'yincome and is subject to the same prices.Calculate the market demand for x as a functionof income and prices.5. Suppose now that we know m = 250, P = 5,and Py3. What is the market demand for x?This should be a number.==

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Suppose we have a market with 200 individuals with preferences over two goods, x and y. 1. Consider that all 200 individuals have the utility x²/3y¹/3 and that each individual function U has the same income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. 2. Find the own price elasticity of demand for good x. Is the elasticity constant or is it changing at different values of Pr? 3. Suppose now that we know m = 135, P = 3, = 4. What is the market demand for x? This should be a number. and Py 4. Consider now that 100 individuals (type A) have the utility function U = x²/3y¹/3 and the other 100 (type B) have the utility function U = x¹/3y2/3. Each individual still has the same income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. Px = 5, 5. Suppose now that we know m = 250, P₂ and P₁ = 3. What is the market demand for x? This should be a number. =

Suppose we have a market with 200 individuals with preferences over two goods, x and y. 1. Consider that all 200 individuals have the utility x²/3y¹/3 and that each individual function U has the same income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. 2. Find the own price elasticity of demand for good x. Is the elasticity constant or is it changing at different values of Pr? 3. Suppose now that we know m = 135, P = 3, = 4. What is the market demand for x? This should be a number. and Py 4. Consider now that 100 individuals (type A) have the utility function U = x²/3y¹/3 and the other 100 (type B) have the utility function U = x¹/3y2/3. Each individual still has the same income and is subject to the same prices. Calculate the market demand for x as a function of income and prices. Px = 5, 5. Suppose now that we know m = 250, P₂ and P₁ = 3. What is the market demand for x? This should be a number. =

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Ursula's utility function is In(x) + 6y, her income is 12, and both prices are 1. (a) What is her demand for x? (b) What is her own-price elasticity for x? (c) What is her income elasticity for x?
3. Consider the following demand function for the good X: QX = (√RPY)/2PX 3.1. Finding the Price Elasticity of Demand (ƐP,D), Income elasticity of demand (ƐR,D) and Cross-elasticity of demand (ƐC,D). Use the values PX = 2, PY = 4 y R = 9. Interpret the results. 3.2. Are X and Y substitute or complementary goods? Explain your answer.
What is the sum of the own price elasticity of demand for X, the cross price elasticities, and the income elasticity of demand for X? Does this hold only for the given type of utility function or all well behaved utility functions? What does this mean?
If the cross-price elasticity of demand for good X with respect to good Y equals 0, how is that value interpreted? These goods are complements, and the quantity demanded of good X increases if the price of good Y decreases. These goods are unrelated, and a change in the price of good Y has no effect on the quantity of good X demanded. These goods are normal goods, and a change in buyers income increases the quantity demanded of good X. These goods are substitutes, and the quantity demanded of good X decreases if the price of good Y decreases.
If X has many close substitutes, there will be large substitution effects (what will theindifference curves look like?). -The demand curve is likely to be flat, with a small increase in price leading to a large decrease in demand.For a normal good, the IE reinforces the SE, causing demand to be flatter. -For an inferiorgood, the IE dampens the SE, leading to a steeper demand curve. Can someone graph the Demand curve for a normal good and an inferior I'm having a hard time visualizing this. Thanks Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
2. Consider the following demand function for the good X:QX = 14 − 2PX + 0, 1R − 0, 5PY . 2.1. Finding the Price Elasticity of Demand (ƐP,D) , Income elasticity of demand (ƐR,D) and Cross-elasticity of demand (ƐC,D ). Use the values PX = 5, PY = 2 y R = 20. Interpret the results. 2.2. Are X and Y substitute or complementary goods? Explain your answer
Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $14 to $16 is____ if your income is $20,000 and___ if your income is $24,000. If the price of a pizza is $12, your income elasticity of demand is_____ as your income increases from $20,000 to $24,000. However, if the price of a pizza is $16, your income elasticity is______ .
Consider the following demand function Qd=1000-4P2+6P*+5Y which describes how the demand Qd for a good depends on its price, P, the price P*of another good and income Y. Calculate the own-price elasticity, the cross price elasticity and income elasticity when P=10, P*=20 and Y=1000. Is demand elastic or inelastic? Are the goods complements or substitutes? Is demand normal?
The demand for hamburgers is given by Qd=10-p and the supply is Qs=4p-10, where pd and ps are, respectively the price paid by demanders and the price received by suppliers. A: Draw the demand and supply functions. What is the price-elasticity of demand? What is the price-elasticity of supply? B: Find the equilibrium quantity and price, and show them on the graph. C: Suppose due to the rising health awareness the demand decreases to Q d=5-p. Find the new equilibrium prices and quantity, and show them on the graph. D: Suppose that the demand and supply are as before, i.e. Qd=10-p and Qs=4p-10, but now the government imposes a quantity tax on the suppler at the rate of 1 per unit of the quantity. What quantity will be sold and what price? E: In part d), what is the total amount of tax collected by the government? How this tax amount is divided between the demanders and supplier? Who pays more and why? Explain
Suppose the income elasticity of demand for food is 0.45 and the price elasticity of demand is - 1.00. Suppose also that Felicia spends $10,000 a year on food, the price of food is $2, and that her income is $25,000. If a sales tax on food caused the price of food to increase to $2.50, what would happen to her consumption of food? Because a large price change is involved, use the arc elasticity to measure the price elasticity of demand rather than a point elasticity. Felicia's consumption of food would decrease by 1000.00 units. (Enter your response rounded to two decimal places.) Suppose that Felicia gets a tax rebate of $2,500 to ease the effect of the sales tax. What would her consumption of food be now? (Again, use an arc income elasticity to answer this question instead of a point income elasticity.) Felicia's consumption of food would now be 4,175.18 units. (Enter your response rounded to two decimal places.) Is she better or worse off when given a rebate equal to the sales tax…
Suppose the change in the price of good A from $20 to $70 causes the individual's demand for good B to shift from D2 to D1. What is the cross price elasticity? Good A Good B $140 $140 $90 $90 $70 $70 $20 $20 D, D, D, 35 45 35 45 10 70 105 140 10 70 105 140
Suppose X and Y are substitutes. If the price of Y increases, the demand for X will most likely _______, and the quantity demanded of X will also _______. 1) increase, increase 2) increase, decrease 3) decrease, increase 4) decrease, decrease 5) None of the above. Q19 Suppose X is a normal good. If the income increases, the demand for X will ______. 1) increase 2) decrease 3) stay the same