Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Student Number: Name: QUIZ 1 Section B Question 1. [5 marks] Suppose the market demand curve for a product is given by Qd=150-15 Pa+10Pb and the market supply curve is given by Qs = -250+10 P a+ 5Pb. a) [3 marks] What are the ranges of Pa and Pb if the equilibrium prices and quantity are positive in this market? 150-15 Pa+10Pb= -250+10 Pa + 5Pb Pa=(400+5 Pb)/25 =(80+ Pb)/5 Pb=5Pa-80 Pa>16 Q=150-15*(80+ Pb)/5+10Pb =150-3*(80+ Pb)+10Pb =150-240+7 Pb =7 Pb -90 Pb>12.86 Q=150-15Pa+10Pb =150-15Pa+10(5Pa-80) =35Pa-650 Pa>18.57>16 b) [2 marks] what is the price elasticity of demand for good a with respect to its own price and what is the cross-price elasticity of demand for good a with respect to price of the other good, Pb? (at the equilibrium, when Pa=20) Pb=5Pa-80=20 Q=7*20-90=50 Elasticity = Qd P P Qd Ea=-15*20/50= -6 Eb=10*20/50= 4 Question 2 [5 marks] Consider the following two utility functions: U1=max [3A, 2B], U2= A0.5B0.5. Please graph the ONE indifference curve for EACH utility function. U1: U2