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?

Consider a market with two goods, x and z. The consumer’s utility function is U = x^0.2z^0.8 A. Derive the demand function for x and z. B. Let ? = 2, = 4 and = 50. Find the equilibrium quantities demanded of x and z.

Suppose your utility for goods x1 and x2 is represented by the following utility function:  U(x1,x2)= x11/5  x24/5 a) What is your marginal rate of substitution, MRS12? b)  If the price for good x1 is p1 = 2, the price for good x2 is p2 = 4, and your available income is m = 20, write down your budget constraint. c) Using the prices and income given at b) above, find your optimal consumption choice bundle (Marshallian demand) and its corresponding utility level. d) Illustrate your optimal consumption choice on a graph. e) For the prices given in b), what income would you need to achieve a utility level of 25?   PLEASE ONLY ANSWER PART C, D AND E

Suppose the market demand for a cup of cappuccino is given by Qp = 24-4P and the market supply for a cup of cappuccino is given by Qs = 8P - 12, where P = price (per cup). Graph the supply and demand schedules for cappuccino. 1.) Using the line drawing tool, draw the demand curve for cappuccino. Label your line 'D'. 2.) Using the line drawing tool, draw the supply curve for cappuccino. Label your line 'S'. 3.) Using the point drawing tool, plot the equilibrium price and quantity. Label your point 'E'. Carefully follow the instructions above and only draw the required objects. Price per cup ($) 10.50- 웅 9.00- 7.50 6.00 4.50 3.00+ 1.50- 3 Market for Cappuccino 6 9 12 15 Cups of cappuccino 18 21 24

Assume the demand curve for Pepsi passes through the following two points. Price per bottle of Pepsi $2.25 $1.75 Number of bottles of Pepsi sold 100,000 275,000 When plotting the demand curve (with price in dollars on the y-axis and quantity in bottles on the x-axis), when the y-value is $2.25, the x-value is the y-value is $1.75, the x-value is bottles. (Enter your responses as whole numbers.) bottles, and when

True/False? Briefly explain. Assume good x is a normal good. In terms of consumer behavior, a cash grant and a small (relative to the initial consumption of x) limited non-matching grant on good x (with the limit that is equal to the cash grant) are essentially equivalent.

If the utility function for a consumer is defined by U=6X^0.6Y^0.7 . Given that the consumer's income is 300 currency units and unit price of goods X and Y are 12 and 15 currency units respectively, calculate the equilibrium quantity of both goods. Compute the price elasticity of demand for both goods and interpret your results. If income and prices of the two goods increase by 50%, calculate the equilibrium quantities of both goods