Question: The generalized demand function for good X is given by: Q d = 200 - 8P X + 5P Y - 3P Z + 0.4M

The generalized demand function for good X is given by:

Qd = 200 - 8PX + 5PY - 3PZ + 0.4M + 10N

Where Qd = the overall demand for good X

PX= the price of X

PY = the price of related good Y

PZ = the price of related good Z

M = consumer per capita income

N = the number of consumers

  1. The coefficient of PY shows that good Y and good X are ___, all other things being equal.

A. substitutes

C. independent

B. complements

D. related in terms of supply

  1. The coefficient of PZ shows that good Z and good X are ___, all other things being equal.

A. independent

C. related in terms of supply

B. substitutes

D. complements

  1. The coefficient of M shows that good X is ______

A. an inferior good

C. a necessity

B. a luxury

D. a normal good but neither a necessity nor a luxury

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