ECON 101 Chapter 7-8: Mankiw, Chapters 7 and 8 - Efficiency and the Costs of Taxation

Now assume the following demand equation for product W:
Qdw= 1800- 40Pw +8.6Y -12Px +1.5Pz
If Pw= $18.50, Y= $1000, Px=140, and Pz= 30

A. Estimate the point of price elasticity of the demand for w at the given value for Pw, Y, Px, and Pz Is demand price elastic or price inelastic at this price of $18.50
B. Estimate the income elasticity of demand for W at the give values Pw, Y, Px, and Pz How would you classify product W?
C. Estimate the cross elasticity of demand between w and x at the values for Pw, Y, Px, and Pz. How would you classify products w and x?
D. Estimate the corss elasticity of demand between w and z at the values for Pw Y, Px, and Pz. How would you classify products w and z?

48) This opening to trade may upset some in each country. We might expect UK__producers and US producers to protest against this change: A) (C, W) B) ( CC) C) (W, W) D) (WC) E) none of the above.

24. If a firm hires labour in a competitive market, and the wage paid to labour is designated by “W”, then the average variable cost of the firm is equivalent to: A) W times the marginal product of labour B) W divided by the average product of labour C) W divided by the marginal product of labour D) W times the marginal cost of production E) W divided by the marginal cost of production F) W times the average product of labour G) the average cost of production minus the variable cost of production H) the average cost of production minus the marginal cost of production 1) the marginal cost of production minus the average fixed cost of production J) none of the above