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ECON 303
Practice Questions for Exam 2
1.
The demand for good X has been estimated by Q
d
= 12  3P
x
+ 4P
y
.
Suppose that
good X sells at $2 per unit and good Y sells for $1 per unit.
a.
What is the ownprice elasticity of demand for good X? (
Answer: 0.6
)
b.
If the price of good X increases by 10%, what would be the expected change
in
the quantity demanded of good X? (
Answer: 6%
)
2.
The demand for good X has been estimated by Q
d
= 15  3P
x
 2P
y
.
Suppose that
good X sells at $1 per unit and good Y sells for $2 per unit.
a.
What is the ownprice elasticity of demand for good X? (
Answer: 0.38
)
b.
If the price of good X decreases by 10%, what would be the expected change
in the quantity demanded of good X? (
Answer: 3.8%
)
3.
Suppose X and Y are the only two goods available for purchase and P
x
= $10, P
y
=
$15, X = 30, and M = 600?
a.
What is the maximum amount of good Y that can be purchased? (
Answer: 20
)
4.
Suppose X and Y are the only two goods available for purchase and P
x
= $5, P
y
=
$10, Y = 40, and M = 600?
a.
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 Fall '09
 DOUGDAVIS

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