Question One11] iviichaelis monthly demand for peanut butter is given by the equation: 0:30 =10 0.0 P,,,, + 0.044r - 0.20 13 yr} where (23,, equals the amount of peanut butter demanded each month, P,,,, equals the price of peanut butter, per unit. iequals iviichael's monthly income, and P,,,equals the price ofjelly, per unit. Notice that the sign on the price otjelly is negative, indicating that when jelly increase in price, less peanut butter is purchased; thus, according to this equation, peanut butter and jelly are complements. Assume that the per unit price of peanut butter is $20.25, household income is $4,500, and the per unit price otjelly is $25.50. Determine the amount of peanut butter demanded by Michael each month. Given the values for land Pm. determine the inverse demand function. Determine the slope of the demand curve for peanut butter. Calculate the vertical intercept {price-axis intercept) ofthe demand curve if income increases to $5,000 per month. Question Two [21 An individual seller's monthly supply of peanut butter is given by the equation Hit-0027' 0;, : -705 + 40.5 0,\Question Three {3] A household monthly demand for peanut butter is given by the equation 05.: =10 00 pi... + 0.04r - 0.20 gr. where di equals the amount of peanut butter demanded each month. PM equals the price of peanut butter. per unit. iequals household monthly income. and Pmequals the price ofjelly. per unit. Assume that household income is 84.500 and the per unit price of Jelly is 825.50. The market consists of 1.000 identical households with this demand function. 1. Determine the market aggregate demand function. 2. Determine the inverse market demand function. 3. Determine the slope of the market demand curve. Question Four {41 In the local market for peanut butter, the aggregate demand is given by the equation 030 = 10,000 800 Pm + 40f - 200 PM and the aggregate supply is given by the equation 0% = -?00.5 + 400.5 PM -50.5W where (2,7d is amount ofpeanut butter demanded, Pm is the per unit price of peanut butter, i is household income. Wis wage rate paid to peanut butter laborers. and PM is the per unit price ofjelly. Assume iis $4,500: Wis 820, and Ed is $25.50. Determine the equilibrium price and quantity of peanut butter in this local market. Question Five [51 In the local market for peanut butter, the aggregate demand is given by the equation (25.5: = 46D 50 PM and the aggregate supply by the equation @511 = 428 + 30 PM '1. Determine the amount of excess demand or supply if price is 85. 2. Determine the amount of excess demand or supply if price is 88. Question Six [6] A market demand and supply functions are given by the equation Q\" = 200 2P (2\" = 200 + 5P Where Q\" is market demand; Q" is market supply Determine the value of consumer and producer surplus if price is equal to 50. Question Seven [7! Michaelis monthly demand for peanut butter is given by the equation 05,1 =10 0.0 PM + 0.04:r - 0.20 p yr.' where di equals the amount of peanut butter demanded each month. iequals the Michael's monthly income. PM. equals the per unit price of peanut butter: and PM equals the per unit price ofjelly. Assume that the per unit price of peanut butter is $20.25. Michael'sl income is 9134:500, and the per unit price ofjelly is $25.50. 1. Determine the value of own-price elasticity of demand for peanut butter. 2. Determine the income elasticity of demand for peanut butter. 3. Determine the cross-price elasticity of demand for peanut butter with respect to the price ofjelly