EP ECON.TODAY:MACRO VIEW-MYECONLAB W/TX
EP ECON.TODAY:MACRO VIEW-MYECONLAB W/TX
19th Edition
ISBN: 9780134481234
Author: Miller
Publisher: PEARSON CO
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Chapter 20, Problem 13P
To determine

In problem 20-12, if the consumer's income rises to $190 per week, what new quantities characterize the new consumer optimum?

20-12 Refer to the following table for a different consumer and assume that each week this consumer buys an only weekly subscription to economic statistic apps subscriptions to office productivity apps. The price of a subscription to each type of economic statistic app is $2 per week, and the price of a subscription to each office productivity app is $60 per week. If the consumer's available income is $128 per week, what quantity of each item will the individual purchase each week at a consumer optimum?

EP ECON.TODAY:MACRO VIEW-MYECONLAB W/TX, Chapter 20, Problem 13P

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.
Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…
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