Note: The answer should be typed. The demand for good X is given byQxd = 6,000 (1/2)Px − Py + 9Pz + (1/10)MResearch shows that the prices of related goods aregiven by Py = $6,500 and P₂ = $100, while the averageincome of individuals consuming this product is M =$70,000.a. Indicate whether goods Y and Z are substitutes orcomplements for good X.Good Y is: (Click to select) neither complement norsubstitute a substitute a complement.Good Z is: (Click to select) a substitute neithercomplement nor substitute a complement.b. Is X an inferior or a normal good?Good X is: (Click to select) an inferior good a normalgood neither a normal nor an inferior good.c. How many units of good X will be purchased when Px= $5,230?d. Determine the demand function and inverse demandfunction for good X. Graph the demand curve for goodX.Instruction: Enter all values as integers, or if needed, adecimal rounded to one decimal place.Demand function: - PxInverse demand function: Px ==- QxdInstruction: Use the tool provided 'D' to graph theinverse demand curve from Qx = 0 to Qx = 6,000 (twopoints total).

Note: Since you have posted a question with multiple sub parts, we will provide the solution only to…

a. Indicate whether goods Y and Z are substitutes or complements for good X. Good Y is: (Click to select) neither complement nor substitute a substitute a complement. Good Z is: (Click to select) a substitute neither complement nor substitute a complement. b. Is X an inferior or a normal good?

a. Indicate whether goods Y and Z are substitutes or complements for good X. Good Y is: (Click to select) neither complement nor substitute a substitute a complement. Good Z is: (Click to select) a substitute neither complement nor substitute a complement. b. Is X an inferior or a normal good?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.1P

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Question

Note: The answer should be typed.

The demand for good X is given by
Qxd = 6,000 (1/2)Px − Py + 9Pz + (1/10)M
Research shows that the prices of related goods are
given by Py = $6,500 and P₂ = $100, while the average
income of individuals consuming this product is M =
$70,000.
a. Indicate whether goods Y and Z are substitutes or
complements for good X.
Good Y is: (Click to select) neither complement nor
substitute a substitute a complement.
Good Z is: (Click to select) a substitute neither
complement nor substitute a complement.
b. Is X an inferior or a normal good?
Good X is: (Click to select) an inferior good a normal
good neither a normal nor an inferior good.
c. How many units of good X will be purchased when Px
= $5,230?
d. Determine the demand function and inverse demand
function for good X. Graph the demand curve for good
X.
Instruction: Enter all values as integers, or if needed, a
decimal rounded to one decimal place.
Demand function: - Px
Inverse demand function: Px ==
- Qxd
Instruction: Use the tool provided 'D' to graph the
inverse demand curve from Qx = 0 to Qx = 6,000 (two
points total).

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