Question: 1. Given a demand function Qd=10+ 0.25Yd-0.9P, where Qd: quantity demanded, Yd: disposable income (ie. after-tax income), Yd=Y-T, P: price. Assume all other things

1. Given a demand function Qd=10+ 0.25Yd-0.9P, where Qd: quantity demanded, Yd:

1. Given a demand function Qd=10+ 0.25Yd-0.9P, where Qd: quantity demanded, Yd: disposable income (ie. after-tax income), Yd=Y-T, P: price. Assume all other things being held constant, based on this demand function, does it make sense that Qd and Yd have a positive relationship? Does it make sense that Qd and P have a negative relationship? 2. A study of expenditures on drink in cities resulting in the following equatigin: Log E = 0.673 Log Y+0.158 Log N where E is drink expenditures; Y is total expenditures on goods and services, and N is the size of the family. Using your own words, what does this equation imply?

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