In: Economics
The demand for good X is given by
QXd =10000−2PX +10PY −5PZ +I
where QXd is the demand for good X, PX is the price of good X, PY is the price of good Y, PZ is the price of good Z, and I is income. PX = $1000, PY = $500, PZ =$1000,andI=$2000.
a. Indicate whether goods Y is substitutes or complements for good X.(5 points)
b. Indicate whether goods Z is substitutes or complements for good X. (5 points)
c. Is X an inferior or a normal good? (5 points)
d. Calculate the cross-price elasticity of demand for good X with respect to good Z. (5 points)
e. Calculate the income-elasticity of demand for good X. (5 points)