Question: A person's demand for gizmos is given by the following equation:

where \(q\) is the quantity demanded at price \(p\) when the person's income is \(I\). Assume

initially that the person's income is $\$ 45,000$.

1. At what price will the quantity demanded for gizmos fall to zero? (This is sometimes called the choke price because it is the price that chokes off demand).
2. If the market price for gizmos is $\$ 10$, how many units will be demanded?
3. At a price of $\$ 10$ and an income of $\$ 45,000$, what is the price elasticity of demand
   for gizmos?
4. At a price of $\$ 10$ and an income of $\$ 45,000$, what is the income elasticity of
   demand for gizmos?
5. At a price of $\$ 10$, what is the consumer surplus?
6. If price rises to $\$ 14$, how much consumer surplus is lost?
7. If income were $\$ 60,000$, what would be the consumer surplus loss from a price

rise from $\$ 10$ to $\$ 14$ ?

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