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- The horizontally oriented definition of DEMAND states that "demand is the quantitites of a good that buyers are willing and able to buy at various prices in a given time interval." Which of the following statements are TRUE? If I really like a good, it does not matter how much I am able to afford to spend on it. The demand for a good is a specific amount. Demand is a behavioral relationship expressing what quantities buyers would want and be able to buy at various prices. If I can't afford to buy a product at today's available prices, I do not have a demand. The demand is all the possible price quantity combinations Demand depends on the availability of supply. Demand is a relationship between price as a variable and quantity demanded as a variable. Demand is a flow and requires a time interval be be fully understood.. Suppose the demand for good x is given by the following equation Qdx=60-40px+21-30Py where Qdx is the quantity demanded of good x,Px is the price of good x,I is income, andPy is the price of good y a. On a clearly labeled graph, plot the demand curve assuming Py is $6 and income is $700.Remember to identify and label the intercept points. Label your curve D1.b. On the same graph, plot the demand curve assuming Py is $6 and income is $900.Remember to identify and label the intercept points. Label your curve D2.For the remainder of the problem, assume Px is $12, Py is $6 and income is $700.c. Using calculus, compute the price elasticity of demand for good x.d. Using calculus, compute the cross-price elasticity of demand for x and y. Explain themeaning of the value you computed.e. Using calculus, compute the income elasticity of demand. Explain the meaning of the valueyou computed.f. Suppose the supply of good x is given by the equation QSX=100PX-400 Find theequilibrium price and…The following figure shows the demand curve for good x for an agent whose demand function for good y is Qy(px,py,W)=3W/(px+3py). The agent’s preferences satisfy more is better. The figure is a two-axis graph in which the horizontal axis measures Qx and the vertical axis measures px. The demand curve shown, in blue, is a downward sloping curve. It passes through the points (56,2) and (70,1). What is the value of W in the curve shown in the figure? 220 320 280 360 200
- PROBLEM 3 – Slutsky Equation, Income Effect, Substitution Effect, and Total Effect There are two goods which quantities are to be denoted by x and y, while prices are denoted by px and py, respectively. There is a consumer whose income is to be denoted by I and utility by u. His expenditure function is known to be: *see image* Using slutsky equation, decompose the effect of an infinitesimal increase in Px on demand of good x.A consumer is in equilibrium when Px = 7 and Py = 4, and he is consuming 40 units of good X and 80 units of good Y. If Py increases to Rs. 5, he moves to a new equilibrium where he consumes 50 units of good X. Beginning from the new equilibrium, if income increases by Rs 100 and the consumer decides to consume 65 units of good Y, what will be the shape of the ICC and the Engel curve? Calculate and explain. Also draw the demand curve for Y indicating the above scenario.Suppose that an individual has a Utility function represented by a CES function. The utility function of the individual is given as: U(x,y) = x1/2 + y1/2 c. Is the demand more elastic or inelastic than a Cobb-Douglas Utility function? Use the Slutsky matrix to illustrate.PLEASE SKIP IF YOU ALREADY DID THIS
- On what portion of the demand function does total revenue rise as price rises? The price of tea cakes goes up by 1%. As a result, the quantity purchased of tea falls by 1.5%. If income rises and consumers buy more of a particular good, that good is? Assume the budget constraint and the indifference curves are both linear. Assume the consumer is willing to tradeoff 1 of good X for 1 of good Y. If the relative price of one additional good X is giving up 1/2 of good Y, then the optimal bundle of the two goods is? What condition describes the optimal bundle of goods X and Y where utility is maximized [M=income, MU=marginal utility, P=price]If the demand function face by the consumer for good X is given by X=15+MP-120 Where X = Quantity demanded, M = income and P = Price of product X. Assume his original income is Kshs. 3200 per month and price of good X has increased from Kshs. 10 per unit to Kshs. 20 per unit. Calculate the magnitude of total effect (TE), substitution effect (SE) and income effect (IE) resulting from this change in price.How does a consumer maximizes their utility given that they experience a budget constraint? Explain with graphical illustrations. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
- If a 5 percent decrease in the price of Good A results in an increase of 8 percent in the quantity demanded of Good B, then it can be concluded that Goods A and B areAssume that a consumer finds that his total expenditure on compact discs stays the same after the price of compact discs declines. Which of the following is true for this price change? Compact discs are inferior goods to this consumer. The consumer's demand for compact discs increased in response to the price change. The consumer's demand for compact discs is perfectly price elastic. The consumer's demand for compact discs is perfectly price inelastic. The consumer's demand for compact discs is unit price elastic. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.Assume the demand function for good X can be written as: QX = 30 - 3PX + 2PY + 0.2I Where PX is the price of good X PY is the price of good Y I is the consumer income. a) Based on the demand curve above, is X a normal or inferior good? b) Based on the demand curve above, what is the relationship between good X and good Y? c) What is the equation of the demand curve if consumer incomes are $40,000 (use $40, income in thousands) and the price of good Y is $35?
