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

Given the same price elasticity of supply, sellers would be able to pass along the smalles portion of a 10%tax on which item?
Beef with a price elasticity of demand of .62
Pork with a price elasticity of demand of .73
Chicken with a price elasticity of demand of .32
Fish with a price elasticity of demand of .12

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

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What can you say about your price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic? Be sure t

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.

Suppose the price of apples rises from $3.50 a pound to $4.00 and your consumption of apples drops from 30 pounds of apples a month to 20 pounds of apples. Calculate your price elasticity of demand of apples. What is the price elasticity of demand of apples? Is it Elastic, Inelastic, or Unitary Elastic?

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

If the market demand curve is Q=100-p. What is the market price elasticity of demand? If the supply curve of individual firms is q=p and there are 50 identical firms in the market, draw the residual demand facing any one firm. What is the residual demandelasticity facing one firm at the competitive equilibrium?

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