Q. 1. Continue to read chapter 4 of your text book that deals with demand analysis. Every assignment ought to answer in English. Remember; show how you obtained your final result. Take into account the due dates. Prevent plagio. Late assignments have a penalty of two points. Submit assignments as attachment for easier correction.
In addition pay attention to the following concepts: Law of diminishing marginal utility, ordinal utility, cardinal utility, marginal utility, characteristics of indifference curves, perfect complements, perfect substitutes, price consumption curve, income consumption curve,. Engel curve and condition for utility maximization
2. Evaluate the following expressions
You possess the following information about IPATH. The price elasticity of demand for IPATH is -2.5; The cross price elasticity of demand for IPATH with respect to Laptops is +0.50; the income elasticity for IPATH is +3.0.
a. If the price of IPATH were increased by 4%, by what percentage would sales of IPATH change?
b. An increase in the price of IPATH would increase the demand for laptops by 2%
c. Suppose that the price of IPATH increases by 5%,at the same time the price of laptops falls by 3% and income elasticity increases by 2%. What combined effect of these changes is expected with respect to sales of IPATH?