Economics Today: The Micro View (18th Edition)
18th Edition
ISBN: 9780133885071
Author: Roger LeRoy Miller
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 2P
Table 19-2 indicates that the short-run
| Estimated Elasticity | ||
| Category | Short run | Long run |
| Air travel (business) | 0.4 | 1.2 |
| Air travel (vacation) | 1.1 | 2.7 |
| Beef | 0.6 | N.A |
| Cheese | 0.3 | N.A |
| Electricity | 0.1 | 1.7 |
| Fresh tomatoes | 4.6 | N.A |
| Gasoline | 0.2 | 0.5 |
| Hospital services | 0.1 | 0.7 |
| Intercity bus services | 0.6 | 2.2 |
| Physician services | 0.1 | 0.6 |
| Private education | 1.1 | 1.9 |
| Restaurant meals | 2.3 | N.A |
| Tires | 0.9 | 1.2 |
Table 19-2
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BEC 3701 - Assignments-...
KWAME NKRUMAH UNIVERSITY
TEACHING FOR EXCELLENCE
SCHOOL OF BUSINESS STUDIES
DEPARTMENT OF ECONOMICS AND FINANCE
ADVANCED MICRO-ECONOMICS (BEC 3701)
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INSTRUCTIONS:
Check instructions below:
LTE
1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote
P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of
the following:
a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks]
b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks]
c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks]
d) the Expenditure Function E(P1, P2, U°) [3 Marks]
e) Draw a diagram of the solution. There should be two graphs, one above the other; the
first containing the indifference curves and budget constraint that characterize the
solution to the consumer's choice problem; the second characterizing the demand…
Chapter 19 Solutions
Economics Today: The Micro View (18th Edition)
Ch. 19 - Prob. 19.1LOCh. 19 - Prob. 19.2LOCh. 19 - Prob. 19.3LOCh. 19 - Prob. 19.1SCCh. 19 - Prob. 19.2SCCh. 19 - Prob. 19.3SCCh. 19 - Prob. 1CTQCh. 19 - Prob. 2CTQCh. 19 - Prob. 1FCTCh. 19 - Prob. 2FCT
Ch. 19 - When the price of shirts emblazoned with a college...Ch. 19 - Table 19-2 indicates that the short-run price...Ch. 19 - The diagram below depicts the demand curve for...Ch. 19 - Prob. 4PCh. 19 - At a price of $57.50 to play 18 holes on local...Ch. 19 - Prob. 6PCh. 19 - In the market for hand-made guitars, when the...Ch. 19 - Prob. 8PCh. 19 - 19-9. Based solely on the information provided...Ch. 19 - Prob. 10PCh. 19 - Prob. 11PCh. 19 - A 5 percent increase in the price of digital apps...Ch. 19 - Prob. 13PCh. 19 - Assume that the income elasticity of demand for...Ch. 19 - At a price of $25,000, producers of midsized...Ch. 19 - Prob. 16P
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