Reference no: EM131244532
Assume that the demand function for artichokes is :
Q = 200 – 40 P + 5I – 11 Pb + 14Pc
where
Q is the quantity demanded of artichokes in pounds per month
P is the price of artichokes in dollars per pound
I is average household income in thousands of dollars per year
Pc is the price of carrots in dollars per pound
Pb is the price of butter in dollars per pound
If average household income increases by 5 thousand dollars per year then :
a. the vertical intercept for the demand curve increases by 5 pounds per month
b. the demand curve shifts rightward by 25 pounds per month.
c. the demand curve shifts downward because the good is inferior
d. the demand curve shifts upward by 25 dollars
e. I increases by 25.
According to the demand function from the previous information
a. artichokes are inferior
b. the Law of demand is violated
c. artichokes are a Giffen good
d. carrots and artichokes are substitutes
e. there is an excess demand for artichokes.
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