The demand for good X has been estimated to be ln Qxd = 100 − 2.5 ln PX + 4 ln PY + ln M. The income elasticity of good X is:

4.0.

1.0.

2.0.

−2.5.

What is the value of a preferred stock that pays a perpetual dividend of $150 at the end of each year when the interest rate is 3 percent?
Instruction: Round your response to the nearest dollar.

You've recently learned that the company where you work is being sold for $380,000. The company's income statement indicates current profits of $15,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and that the interest rate will remain constant at 6 percent, at what constant rate does the owner believe that profits will grow?
Instruction: Round your response to 2 decimal places.

The supply curve for product X is given by QXS = -460 + 20PX .

a. Find the inverse supply curve.
P=___________+____________Q
b. How much surplus do producers receive when Qx = 380? When Qx = 1,120?
When QX = 380
When QX = 1,120

Suppose the cross-price elasticity of demand between goods X and Y is 5. How much would the price of good Y have to change in order to change the consumption of good X by 40 percent?

If Starbucks's marketing department estimates the income elasticity of demand for its coffee to be 1.7, how will the prospect of an economic boom (expected to increase consumers' incomes by 4 percent over the next year) impact the quantity of coffee Starbucks expects to sell?
Instruction: Round your response to 2 decimal places.

The demand for good X has been estimated to be ln Qxd = 100 − 2.5 ln PX + 4 ln PY + ln M. The income elasticity of good X is:

4.0.

1.0.

2.0.

−2.5.
Income elasticity is the coefficient of Income in the equation. ln Qxd = 100 − 2.5 ln PX + 4 ln PY + ln M
Answer: 1.0

What is the value of a preferred stock that pays a perpetual dividend of $150 at the end of each year when the interest rate is 3 percent?
Instruction: Round your response to the nearest dollar.
Value of a preferred stock = Dividend payment / interest rate = $150/3%= ...

Solution Summary

Solves 7 small problems about demand- supply and elasticity. Can be used as a good practice.

Explain the following
Law of demandand law of supply
Factors affecting demandandsupply
Price elasticity of demand
Factors affecting price elasticity of demand

1. Determine the price elasticity of demand at each quantity demanded using the formula: Percentage change in quantity demanded = (Q2-Q1)/Q1 divided by percentage change in price = (P2-P1)/P1
b. Redo exercise 1a using price changes of $10 rather than $5
c. Plot the price and quantity date given in the demand schedule. Indi

The demand for company X product is given by Q(x) = 12 - 3P(x)+ 4P (y)
Suppose good X sells for $3.00 per unit and good Y sells for $1.50 per unit.
a. Calculate the cross-price elasticity of demand between goods X and Y at the given prices.
b. Are goods X and Y substitutes or complements?
c. What is the own price elastici

Consider a service that you buy frequently. (Can use pedicure 2 times per month at $50 for graph and calculation)
a. Suppose that the price was 5% lower and all other factors do not change. How much more would you buy each year?
b. Using this information, calculate the own-price elasticity of your demand.

1. You read in the paper a story about grapefruit markets. The story contains the following information:
A. There has been a frost in the "Grapefruit belt" and a lot of lost plants.
B. There is a new kind of fertilizer that can increase yields by 20%
C. The International Union of Grapefruit Pickers and Packers has just neg

1. Suppose the market demand curve for a Product is given by Q = 250 - 5P and the market supply curve is given by Q = -50 + 25P.
1. What are the equilibrium price and quantity in this market?
2. At the market equilibrium, what is the price elasticity of demand?
3. Suppose the price in this market is $8. What is the amou

How does Oil Prices in Year 2009 affect DemandandSupply of consumers and suppliers?
When Oil prices rises, does the demandandsupply curve move? If they do, which direction did they move?
Based on your analysis, why does a demand curve shift in demand when oil prices increase in 2009? And how does it affect the supply

Suppose the demand for good x is lnQxd = 21 - .8 lnPx - 1.6 lnPy + 6.2 lnM + .4 lnAx. Then we know that the own-price elasticity for good x is:
A. unitary.
B. elastic.
C. inelastic.
D. Indeterminable.