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Could use some help with these questions! Thanks Questions 1-5 concern the following demand function of an individual for good 1: Q1 2 30 +
Could use some help with these questions! Thanks
Questions 1-5 concern the following demand function of an individual for good 1: Q1 2 30 + 161131 + 16239: + 1331?: +134? where g, is the amount of good 1 consumed, p1, p2 , 155 are the prices of goods 1, 2, and 3, respectively, and Yrepresents the income of a person. Note that the amount consumed (ql ) depends not only on its own price, but also on how much money a person has (Y) and also how much it would cost to buy goods other than good 1. The betas ( l, g, 133, ,64) are parameters that stand in for real numbers that could be a negative number, positive number, or zero. 1. (3 points) Take the partial derivative of 9'1 with respect to p1 , that is, calculate: % P1 Explain in words what this tells us (hint: make a sentence that starts out: When the price of good 1 rises by one unit, ___.) What sign (+, , or 0) do you expect the partial derivative to have? 2. [3 points) 1 Take the partial derivative of q, with respect to p2 , that is, calculate: a = 2 Explain in words what this tells us. If good 1 consumption rises when the price of good 2 rises, what sign does the partial derivative to have? What does this imply about goods 1 and 2? 3. [3 points) Take the partial derivative of 9'1 with respect to F, that is, calculate: % =Step by Step Solution
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