question
0.82.
answer
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, the income elasticity of good X is
question
greater than or equal to 2.
answer
As a rule-of-thumb, a parameter estimate is statistically different from zero when the absolute value of the t-statistic is:
question
Inelastic
answer
As we move down along a linear demand curve, the price elasticity of demand becomes more
question
-0.6
answer
The demand for good X has been estimated by Q xd = 6 - 2Px + 5Py. Suppose that good X sells at $3 per unit and good Y sells for $2 per unit. Calculate the own price elasticity.
question
will not reduce quantity demanded by very much.
answer
Since most consumers spend very little on salt, a small increase in the price of salt
question
2/3
answer
If the demand function for a particular good is Q = 25 - 10P, then the price elasticity of demand (in absolute value) at a price of $1 is
question
more elastic than the demand for clothing.
answer
We would expect the demand for jeans to be:
question
4.
answer
The demand for good X has been estimated to be lnQ xd = 100 - 2.5 lnPX + 4 lnPY + lnM. The cross price elasticity of demand between goods X and Y is
question
video recorders are normal goods and video recorder film is a complement for video recorders.
answer
The demand for video recorders has been estimated to linear and given by the demand relation Qv = 145 - 3.2Pv + 7M - .95Pf - 39Pm, where Qv is the quantity of video recorders, Pf denotes the price of video recorder film, Pm is the price of attending a movie, Pv is the price of video recorders, and M is income. Based on the estimated demand equation we can conclude:
question
Inelastic
answer
The demand for good X is estimated to be Q xd = 10,000 - 4PX + 5PY + 2M + AX, where PX is the price of X, PY is the price of good Y, M is income and AX is the amount of advertising on X. Suppose the present price of good X is $50, PY = $100, M = $25,000, and AX = 1,000 units. Based on this information, we know that the demand for good X is
question
increase by 24.5%.
answer
The cross price elasticity of demand between goods X and Y is -3.5. If the price of X decreases by 7%, the quantity demanded of Y will:
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