Assignment: DEMAND INTERPRETATON EXERCISE
Analyze the demand function for Toyotas in problem C4, page 82. Please also read "What is a Symbol" located in the folder with this assignment.
1. Characterize this function by circling all in the following list that are applicable:
Univariate, bivariate, multivariate, linear, exponential, logarithmic, curvilinear, 1st degree, 3rd degree, additive, multiplicative, linearly homogeneous
2. What is the numerical value of the partial derivative of the function with respect to the price of Mazdas (be sure to also include the + or - sign. Note: I do not want the symbol for this partial derivative)?
3. Write the mathematical symbol representing the coefficient of advertising (the numerical value of this coefficient is +.003, but the answer you give is to be the symbol representing this partial derivative).
4. Assuming there is a $1 increase in advertising expenditures, what change in Toyota demand will result (give the numerical value, too)?
5. Is gasoline a substitute for or complementary to Toyotas? What feature of the function tells you?
6. Are Mazadas substitutes or complements to Toyotas? What feature of the function tells you?
7. Is a Toyota a normal or an inferior good? What feature of the function tells you?
8. Assuming there is a $1000 Toyota price decrease, what change in quantity demanded of Toyotas will result (give the numerical value, too)?
9. Assuming there is a $1000 increase in average family income, what change in Toyota demand will result (give the numerical value of it, too)?
10. Assuming there is a $1000 decrease in the price of Mazdas, what change in Toyota demand will result (give the numerical value of it, too)?
Text Book: Managerial Economics: Analysis, Problems, Cases, 8th edition (revised, 2006), by Truett and Truett published by John Wiley & Sons. ISBN 13 is #9780470009932. The ISBN 10 is #0470009934.
Attachment:- What-is-a-Symbol.rar