Question

You are analyzing the market for Good X. You know the following:

PEDx = -1.3

IEDx = 2.4

CPE(x,y) = 2

PESx = 1.4

a. If the price of Good Y increases, what do you expect to happen in the market for Good X? Describe any changes that may happen in a supply/demand graph and be sure to include how equilibrium price/quantity changes.

b. Does knowing the price elasticity of supply help you determine how much the supply curve will shift?

Answer #1

Consider a perfectly competitive market in good x consisting of
250 consumers with a utility function: Denote Px to be the price
for good x and suppose Py = 1. Each consumer has income equal u(x,
y) = xy to 10. There are 100 firms producing good x according to
the cost function c(x) = x^2 + 1.
(a) Derive the demand curve for good x for a consumer in the
market.
(b) Derive the market demand curve for good...

WTH Inc. exhibits the following production relationship between
costs and quantity of Good X: Total Quantity = 1, Marginal Cost =
$200; Total Quantity = 2, Marginal Cost = $ 40; Total Quantity = 3,
Marginal Cost = $ 30; Total Quantity = 4, Marginal Cost = $130;
Total Quantity = 5, Marginal Cost = $175; Construct a Table of all
relevant costs and construct the Graph of WTH's Supply Curve for
Good X. Point out (and give explanation of)...

Consider the market for good x (good
x is an inferior good), now let’s assume
that household income has risen in the overall economy while at the
same time the price of good y has
increased. Good x and
y are substitutes in production. What
will be the overall effect on equilibrium price and quantity?
Hint: do not use a graph.

if downward revision of inflation is expected what do we know
about the bond market? if inflation decreases interest rates
decrease if interest decreases price of bond increases bond demand
increases mean price of bond increases so shift demand curve to the
right what do we know about supply? also if supply moves more than
demand quantity decreases if demand moves more than supply quantity
increases. Please tell me if my assumptions are correct and what
else I should know...

Question 1:
Consider a perfectly competitive market in good x consisting of
250 consumers with utility function:
u(x,y) = xy
Denote Px to be the price for good x and suppose Py=1. Each
consumer has income equal to 10. There are 100 forms producing good
x according to the cost function c(x)=x^2 + 1.
a) Derive the demand curve for good x for a consumer in the
market
b) Derive the market demand curve for good x
C) Derive the...

1. Consider the following demand and supply functions for a good
or service: Qd = 400 - 5P and Qs= 3P.
a) Graph the supply and demand functions in the typical manner
with price per unit (P) on the Y-axis and quantity on the X-axis.
Make sure to clearly mark X-intercept and Y-intercept on the
graph.
b) What is the slope of each line? Show your calculations.
c) What is the equilibrium price and quantity? Show your
calculations. Show the...

Suppose the demand for good X has estimated to be:
lnQxd = 10 - 4lnPx –
2lnPy – 4 lnM.
a. How can you tell that demand is downward sloping?
b. What is the cross-price elasticity of demand between good X
and Y?
c. Are good X and Y substitutes or complements?
d. Is good X a normal or an inferior good?
e. If the price of good X increased by 2 percent, what would
happen to the quantity demanded...

For all parts of this question you are analyzing the market for
Comcast Cable Service in your city. Match the descriptions below
with whether they would increase or decrease supply or demand.
Increase in Supply?
Decrease in Quantity Demanded?
Decrease in Quantity Supplied?
Increase in Demand?
Decrease in Supply?
Increase in Quantity Supplied?
Increase in Quantity Demanded?
Decrease in Demand?
1. The price of Comcast cable service decreases.
2. The minimum wage increases; Comcast must pay its employees a
higher...

Which of the following would result in a leftward shift in the
supply curve for good X can be
attributed
to
a. an increase in the
price of an input used in the production of the good X.
b. an increase the
price of a substitute good in production.
c. an increase in the
price of good X.
d. an increase in the
price of a complementary good in production.
e. more than one of
these choices
Which of the...

Suppose the relationship between Demand for good x (Qx) can be
described by the following linear relationship (Py: price of good
y, I = income):
Qx= 120 – 6Px + 5Py + 3 I
From the demand relationship above, you can conclude: Goods X
and Y are substitute/complementary goods
because_______________________, and a decrease in Py would cause
quantity demanded/demand of Good X to increase/decrease.
Suppose Py = $5 per unit, and I = $10, and Px = $20. At these...

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