Answer the following questions appropriately. Consider an economy in which there are only two goods, Good X and Good Y, which currently cost 50 and 20 respectively. Total consumer income

Answer the following questions appropriately. Consider an economy in which there are only two goods, Good X and Good Y, which
currently cost 50 and 20 respectively. Total consumer income is 1000, which is
currently used to purchase 10 units of Good X and 25 units of Good Y.
Suppose that the price of Good X falls to 40 and that consumption of Good X increases
to 12 units.
(i)
Calculate the price elasticity of demand for Good X.
[1]
(ii)
Calculate the cross-price elasticity of demand for Good Y with respect to the
price of Good X and comment on your answer.
[3]
[Total 4] The future lifetime of a new-born person is defined to be the random variable 7, which
is continuously distributed on the interval [0,], where 0< <co. Assuming ELT15
(Females) mortality, calculate the following probabilities.
(a) P(T > 40 |T > 25)
(b) P(40 <TS70|7 > 25)
[2]

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