Question: (a) The demand for good X has been estimated by Q x d = 12 3P x + 4P y . Suppose that good X

(a) The demand for good X has been estimated by Q xd = 12 3Px + 4Py. Suppose that good X

sells at $2 per unit and good Y sells for $1 per unit. Calculate the own price elasticity.

(b)The cross-price elasticity of demand for textbooks and copies of old exams is 3.5. If the

price of copies of old exams increases by 10 percent, the quantity demanded of textbooks will change by what percent? Please show your calculations.

(You should use the approach given in the section "Obtaining Elasticities from Demand Functions" in Chapter 3).

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