Problem 2 The demand-function for a given consumer good (A) is given as: ?_a=1400−4?_?−2?_?−0.005_? Where PA = 200 USD is the price for good A, PB = 50 USD is the price for good B, and I = 20,000 USD is the disposable income. Question 2.1 Provide examples of three more factors that influence demand of consumer good A, besides the ones presented in the equation above. Briefly explain why and how they would influence demand. Question 2.2. Find price point elasticity for good A and provide an economic interpretation. Question 2.3. Find cross price elasticity between goods A and B and provide an economic interpretation.

Problem 2 The demand-function for a given consumer good (A) is given as: ?_a=1400−4?_?−2?_?−0.005_? Where PA = 200 USD is the price for good A, PB = 50 USD is the price for good B, and I = 20,000 USD is the disposable income. Question 2.1 Provide examples of three more factors that influence demand of consumer good A, besides the ones presented in the equation above. Briefly explain why and how they would influence demand. Question 2.2. Find price point elasticity for good A and provide an economic interpretation. Question 2.3. Find cross price elasticity between goods A and B and provide an economic interpretation.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter3: Supply And Demand: Theory

Section: Chapter Questions

Problem 19QP

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