A Log Form Demand Function for Carpet Was Estimated with the Following

question 4

Multiple Choice

A log form demand function for carpet was estimated with the following results:
Where Q = square feet of carpet
P = Price of carpet
W = average price of wood flooring
Y = Median Income
R = average size of housing units
Using the above information:

• A) when income increases, people will purchase more carpet
• B) when income increases, people will purchase less wood flooring
• C) wood flooring and carpet are complementary goods
• D) wood flooring and carpet are substitute goods
• E) none of the above

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Definitions:

House of Representatives

is the lower chamber of the United States Congress, where members are elected to represent geographical districts for two-year terms.

James Tallmadge

An American politician who proposed an amendment to the Missouri statehood bill, which ignited a nationwide debate over the extension of slavery in the United States.

Senate

The upper chamber in various legislative bodies, particularly in bicameral systems, responsible for making and passing laws.

Slave Trade

The historical trade in which people were captured and sold as slaves, predominantly affecting Africans transported to the Americas.