1. The extended demand function of good X is: QDX = 1400 - 20 PX - 10 PY + 0.1 M where: QDX = quantity demanded of good X, PX = Price of good X, M = Average consumer income, and PY = Price of related good Y (related in consumption to good X). If M = 10,000, PY = 50, and PX = 50; then QDX = __? and if M = 10,000, PY = 50, and PX = 60 then QDX = __?
2. 900, 800
3. 800, 700
4. 900, 700
5. 800, 800

5 points

QUESTION 10

1. The extended demand function of good X is: QDX = 1400 - 20 PX - 10 PY + 0.1 M where: QDX = quantity demanded of good X, PX = Price of good X, M = Average consumer income, and PY = Price of related good Y (related in consumption to good X). In problem 9, you calculated QDX if M = 10,000, PY = 50, and PX = 50 and you calculated QDX if M = 10,000, PY = 50, and PX = 60. Using the two prices for PX and your calculated two quantities demanded of good (QDX), what is the value of the price elasticity of demand between these two points on the demand curve for good X (using the arc elasticity formula).
2. -1.537
3. -1.230
4. -1.375
5. -1.872