The quantity demanded of good x is given by: Q x = 5005 - 150P x +0.7I - 350P y where:

The quantity demanded of good x is given by: Qx = 5005 - 150Px +0.7I – 350Py where:

Px is the price of good x (currently at  $150)

Py is the price of good y (currently at $15)

I is the median income (currently at $40,000)

Calculate the own-price elasticity of demand for good x.

Calculate the income elasticity of good x.

Would you say that x is a relatively elastic or a relatively inelastic good? Are you surprised by the sign of the own-price elasticity of demand? Why or why not?

What kind of good is x? how does good y relate to good x? use appropriate jargon when answering

SOLUTIONQx = 5005 - 150Px +0.7I – 350Py where:Px is the price of good x (currently at $150)Py is the price of good y (currently at $15)I is the median income (currently at $40,000)a)...