Find own-price cross-price and income elasticities of demand

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1. The demand function for x is given by x(px, py, I)= 5px^(-1/2)py^(1/4)i^(1/4). Find own-price, cross-price and income elasticities of demand.

2. The demand for gym at UBC is given by P=15-Q/2. It costs 1$ per person to operate the gym. (i) Suppose that initially the admission to the gym is set at cost i.e. $1. What is the consumer surplus in this case? (ii) Now suppose that the price of admission had been raised to 5. What is the change in the consumer surplus compared to part (i)?

Reference no: EM13969683

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