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What is the change in consumer surplus

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Question 1: Suppose demand for good A is given by QA = 500-10PA+2PB +0.7I where PA is the price of good A, PB is the price of some other good B, and I is income. Assume PB is $5, and I is $100. Assume PA is currently $10, what is the elasticity of demand for good A at the current situation?

Question 2: The aggregate demand for good X is Q = 20 - P. If the price rises from P = $4 to P = $5, what is the change in consumer surplus?

Question 3: An individual consumes products X and Y and spends $25 per time period. The prices of the two goods are $3 per unit for X and $2 per unit for Y. The consumer in this case has a utility function expressed as: U(X,Y) = 0.5XY How much X should this individual consume, given that he is maximizing the utility?

Reference no: EM132422726

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