# Project #72875 - Economics 5 Questions

Thanks!

1.       A bond pays \$1,000 at the end of each year for 5 years plus an additional \$5,000 when the bond matures at the end of 5 years. What is the most you would be willing to pay for this bond if your opportunity cost of capital is 5%?

2.       Suppose the own price elasticity of demand for good X is -3, its income elasticity is 2, and the cross price elasticity of demand between good X and Y is -5. Determine how much the consumption of this good will change if:

a.       The price of good X increases by 5%

b.      The price of good Y increases by 12%

3.       Suppose demand and supply are given by Qd = 100 - P and Qs = 2P + 25.

a.        What are the equilibrium quantity and price in this market?

b.      Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of \$ 40 is imposed in this market.

c.       Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling of \$ 15 is imposed in this market. Also, determine the full economic price paid by consumers.

4.       A consumer has \$600 to spend on goods X and Y.  The market prices of these two goods are Px = \$30 and Py = \$10.

a.       What is the market rate of substitution between goods X and Y?

b.      Suppose that the consumer's income doubled.  How does that alter the market rate of substitution between goods X and Y?

5.    Below is data on weekly Quantity demanded of pizza in a small town in South Georgia, prices and average household incomes.
Use the data to perform a linear regression analysis of price and income on quantity demanded.

1.    How well does the regression fit the data?

2.    What is the income elasticity of demand for pizza when the income (M) is \$40 (thousand) and the price (P) is \$30?

 Quantity Price Income 1 183 29.25 30.72 2 207 30.1 37.57 3 183 30.54 29.43 4 192 28.67 37.2 5 182 30.23 35.87 6 217 29.76 35.16 7 180 31.77 27.7 8 195 31.01 32.96 9 200 29.21 32.3 10 198 30.79 36.1 11 195 29.75 32.68 12 205 29.98 37.49 13 182 30.06 31.32 14 218 28.94 38.67 15 231 29.76 34.82 16 212 27.94 42.27 17 222 30.75 40.03 18 150 28.96 30.02 19 183 30.96 34.3 20 158 29.03 29.89 21 199 30.83 35.27 22 196 30.6 33.55 23 234 29.98 40.03 24 171 29.27 29.91 25 171 31.42 33.69 26 170 29.24 31.51 27 210 27.61 30.6 28 184 30.64 34.36 29 223 29.97 37.59 30 177 31.87 31.78 31 168 30.06 27.47 32 192 28.83 40.64 33 201 30.91 36.2 34 207 29.84 38.05 35 241 29.94 39.55 36 216 30.67 35.38 37 193 31.03 40.42 38 187 28.45 37.29 39 194 30.02 29.68 40 212 30.85 40.61 41 141 30.46 28.23 42 217 28.85 36.87 43 194 29.34 36.59 44 182 30.1 29.56 45 225 28.88 36.26 46 214 30.2 34.29 47 198 28.56 41.7 48 183 29.51 30.92 49 206 29.86 31.22 50 198 30.83 32.39

6.       Provide an intuitive explanation for why a “buy one, get one free” deal is not the same as a “half price” sale.

 Subject Business Due By (Pacific Time) 06/03/2015 12:00 am
TutorRating
pallavi

Chat Now!

out of 1971 reviews
amosmm

Chat Now!

out of 766 reviews
PhyzKyd

Chat Now!

out of 1164 reviews
rajdeep77

Chat Now!

out of 721 reviews
sctys

Chat Now!

out of 1600 reviews

Chat Now!

out of 770 reviews
topnotcher

Chat Now!

out of 766 reviews
XXXIAO

Chat Now!

out of 680 reviews