Q1. The demand curve is as p = 24 – 3q. Determine the output range for which the demand is elastic?
Q2. Illustrate that an isoelastic demand curve is never linear.
Q3. Illustrate that in a two commodity world, two goods can’t be inferior at similar time.
Q4. A consumer expends 80% of his income on good x, rest on good y. When income elasticity of y is 2.5, and then determine the value of x.
Q5. Illustrate that the sum of own price elasticity of demand, cross elasticity and income elasticity is equivalent to zero.
Q6. The demand curve is as p = 20 – 2q. Compute the consumer’s surplus if 3 units are demanded.
Q7. The market demand for good x is:
Qx = 70 – 3.5Px – 0.6M + 4Pz, where
Qx is the number of units of x demanded;
Px is the price of good x,
M is income; Pz is the price of a related good Z.
a) Is X normal or inferior good? Describe.
b) Are X and Z substitutes or complements?
c) If Px = 10, M = 30, Pz = 6, find out price, income and cross elasticity’s.