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Chapter 2: Answers to Questions and Problems 1. a. Since X is a figure true(p), an increase in income allow head to an increase in the subscribe for X (the pick up influence for X will shift to the right). b. Since Y is an inferior intelligent, a change magnitude in income will go by to an increase in the demand for intimately Y (the demand curve for Y will shift to the right). c. Since favorables X and Y are substitutes, a decrease in the price of proper Y will lead to a decrease in the demand for wide X (the demand curve for X will shift to the left). d. No. The term inferior good does not mean inferior quality, it simply means that income and use of goods and services are oppositionly related. 2. a. The lend of good X will decrease (shift to the left). b. The lend of good X will decrease. to a great extent specifically, the supply curve will shift vertically up by exactly $1 at each aim of output. c. The supply of good X will decrease. more than specifically , the supply curve will rotate counter-clockwise. d. The supply curve for good X will increase (shift to the right). 3. a. Qxs = ?50 + 0.5 ( euchre ) ? 5 ( 30 ) = 50 units. b. Notice that although Qxs = ?50 + 0.5 ( 50 ) ? 5 ( 30 ) = ?175 , negative output is impossible. Thus, sum of money supplied is zero. c. To stimulate the supply function, insert Pz = 30 into the supply parity to obtain Qxs = ?50 + 0.5Px ? 5 ( 30 ) = ? two light speed + 0.5Px .

Thus, the supply equation is Qxs = ?cc + 0.5Px . To obtain the inverse supply equation, simply solve this equation for Px to obtain Px = 400 + 2Qx s . The inverse supply function is graphed in Figure 2-1. ! Price of X $1,600.0 $1,400.0 $1,200.0 $1,000.0 $800.0 $600.0 $400.0 $200.0 $0.0 0 100 200 300 400 S 500 meter of X Figure 2-1 Managerial Economics and Business Strategy, 5e Page 1 4. a. frank Y is a substitute for X, while good Z is a complement for X. b. X is a normal good. 1 1 1 c. Q xd = 1,200 ? ($4,910 ) + ($5,900 ) ? 8($90) + ($55,000) = 5,000 2 4 10 d. For the disposed income and prices of other goods, the demand function for...If you want to fall a full essay, order it on our website: OrderCustomPaper.com

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