1. Cite the three major problems with consumer interviews or surveys and provide an example of each.

2. The estimated market demand for good X is Q = 70 - 3.5P - 0.6M + 4PZ

where Qis the estimated number of units of good X demanded, P is the price of the good, M is income, and PZis the price of related good Z. (All parameter estimates are statistically significant at the 1 percent level.)

a. Is X a normal or an inferior good? Explain.

b. Are X and Z substitutes or complements? Explain.

c. At P = 10, M = 30, and PZ= 6, computeestimates for the price (E), income (EM), and cross-price elasticities (EXZ).