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?
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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Assume the
QX = 30 - 3PX + 2PY + 0.2I
Where PX is the
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?
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