SHORT ANSWER COMPLICATIONS
1 . Consider the following demand and supply capabilities:
Qd = one particular, 600 вЂ“ 125P
Qs = 440 & 165P
(a) Estimate the equilibrium price and quantity that could prevail within completely free marketplace.
(b) Calculate the cost elasticity of supply and demand with the equilibrium ideals.
2 . Suppose the demand contour for a method given by Queen = 10 вЂ“ 2P + Ps, where S is the cost of the item and Ps is the selling price of replacement good. The cost of the alternative good can be $2. 00. Suppose L = $1. 00,
(a) What is the purchase price elasticity of demand?
(b) Precisely what is the cross elasticity of demand?
three or more. The following function shows the marketplace demand for whole wheat: Q пЂЅ 40 пЂ 2P пЂ« 0. 2Y пЂ« Pb where Con refers to cash flow and Pb refers to the price tag on barley. Assuming that wheat and barley equally sell for RM2, and salary is RM10, calculate the cost elasticity, combination price firmness and profits elasticity pertaining to wheat.
4. Express whether all the following is TRUE or PHONY, giving an ideal explanation to your answer in each case:
(a) The cross firmness of demand for all regular good is usually positive. (b) When require is price inelastic, lower prices mean the two higher quantities sold and higher earnings for sellers.
5. The table below shows the estimates of income elasticities for taters and a melon. Type of product
Benefit of the estimates
-- 0. a few
& 0. thirty six
What does the sign in the income elasticities tell us regarding potatoes and oranges?
6. The demand for a new computer game, X-Fear, is given as follows: Q = 200 вЂ“ 5P вЂ“ 0. 1Pc вЂ“ zero. 5Pd & 0. 2A вЂ“ Y
вЂ¦where S is the value of the game, Pc may be the price of your computer, Pd is the cost of a diskette, A is a level of promoting and Y is the amount of income. (i)Suppose P = 10, Pc = 75, Pd = 2, A = 5 and Con = 55, determine the retail price elasticity of demand of X-Fear.
(ii)Based on your own answer to component...
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