Question: b) Assume a two commodity market with a demand function P= f and a supply function Q=k+dP where p is price, Q, is quantity demanded

b) Assume a two commodity market with a demand function P= f and a supply function Q=k+dP where p is price, Q, is quantity demanded and Q, is quantity supplied. Using elimination method, determine Q and P
(5 marks)

c) An economy has the following consumption, savings, investment, tax, exports and imports functions;
C=10+0.2Y,S=-10+0.8Y,I=100-2r,T=50+0.3Y, E = 1000+ 0.5Y,
M=200-0.6Y. Determine the marginal propensities with respect to each function and interpret your findings.
(10 marks)

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