1. Given the demand function Q=500-3P 2P +0.01Y where and P denote quantity and price of the good, is income, and price of an alternative good. P. is the a) If P=20, P₁30, and Y= 5000, find (i) the price elasticity of demand (ii) the cross-price elasticity of demand (iii) the income elasticity of demand b) If income rises by 5%, calculate the corresponding percentage change in deman Is the good inferior or superior?

1. Given the demand function Q=500-3P 2P +0.01Y where and P denote quantity and price of the good, is income, and price of an alternative good. P. is the a) If P=20, P₁30, and Y= 5000, find (i) the price elasticity of demand (ii) the cross-price elasticity of demand (iii) the income elasticity of demand b) If income rises by 5%, calculate the corresponding percentage change in deman Is the good inferior or superior?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 15CTQ: Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the...

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