PQ exam 2

# PQ exam 2 - ECON 303 Practice Questions for Exam 2 1 The...

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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 own-price 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 own-price 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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## This note was uploaded on 12/01/2009 for the course ECON RFGS taught by Professor Dougdavis during the Fall '09 term at VCU.

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PQ exam 2 - ECON 303 Practice Questions for Exam 2 1 The...

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