The empirical demand function for good x is estimated in, Ask an Expert

Economics

The empirical demand function for good X is estimated in log-linear form as

ln ˆQ - 11.74209 - 1.65 ln P + 0.8 lnM - 2.5 lnP_Y

where ˆQ is the estimated number of units of good X demanded, P is the price of X, M isincome, and P_Y is the price of related good Y. (All parameter estimates are significantlydifferent from 0 at the 5 percent level.)

a. Is X a normal or an inferior good? Explain.

b. Are X and Y substitutes or complements? Explain.

c. At P = 50, M = 36,000, and PY = 25, what are the estimated price ( E ), income (E_M),and cross-price elasticities (E_XY)? What is the predicted number of units of good Xdemanded?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M93065997

Have any Question?Write your Review or question?

Related Questions in Business Economics

Multimedia corp has a target capital structure of 70

Multimedia Corp has a target capital structure of 70 percent common stock, 10 percent preferred stock, and 20 percent debt. Its cost of equity is 11.5 percent, the cost of preferred stock is 6.5 percent, and the cost of ...

The mean length of 12 newly hatched iguanas is 700 inches

The mean length of 12 newly hatched iguanas is 7.00 inches with a standard deviation of 0.75 inches. Construct and interpret a 90 % confidence interval for the mean length of all newly hatched iguanas. Assume that the le ...

Charlies utility function is ua b ab where a and b are the

Charlie's utility function is U(A, B) = AB, where A and B are the numbers of apples and bananas, respectively, that he consumes. When Charlie is consuming 20 apples and 80 bananas, if we put apples on the horizontal axis ...

Describe the difference between discrete and continuous

Describe the difference between discrete and continuous variables. Why do we need two different statistical tests to determine if differences in proportions are statistically significant verses differences in proportions ...

State the total degrees of freedom for the

State the total degrees of freedom for the following t -tests. (If you need to use ∞, enter INFINITY.) (a) n = 17 for a one-independent sample t -test (b) df 1 = 12, n 2 = 18 for a two-independent sample t -test ...

Assume the random variable x is normally distributed with a

Assume the random variable x is normally distributed with a mean u=80 and a standard deviation o=4. Find the indicated probability. P(69 P(69 Round to four decimals places as needed.

Determine the minimum sample size required when you want to

Determine the minimum sample size required when you want to be 95% confident that the sample mean is within one unit of the population mean. Assume a standard deviation of 4.3 in a normally distributed population.

Consider the following estimated regression model relating

Consider the following estimated regression model relating annual salary to years of education and work experience. Estimated Salary=11,756.80+2723.3(Education)+1092.64(Experience) Suppose an employee with 11 years of ed ...

1 the following table shows the prices and quantity

1. The following table shows the prices and quantity demanded of Alberta wheat in 2014 and 2015. The change in 2012 resulted from exceptional weather, resulting in a bumper crop. 2014 2015 Bushels demanded 1.74 billion 1 ...

Determine the sample size n needed to construct a 99

Determine the sample size n needed to construct a 99?% confidence interval to estimate the population mean when σ=24 and the margin of error equals 9.

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Business Economics Expert