Scenario 4.5:
The demand curve for grilled cheese sandwiches has been estimated using statistical techniques as follows:
log(Q) = -1.10 - 0.18 log(P) + 1.21 log(I) + 0.84 log(Ph)
where Q is the quantity of grilled cheese sandwiches
P is the price of grilled cheese sandwiches
I is income
Ph is the price of hamburgers
-See Scenario 4.5. The Engel curve for grilled cheese sandwiches is:

Question

Quizplus · Accepted Answer

The Engel curve shows the relationship between income and quantity demanded of a good, holding all other factors constant. In this scenario, the Engel curve for grilled cheese sandwiches would be upward sloping because the coefficient on the income variable (1.21) is positive, indicating that as income increases, so does the quantity of grilled cheese sandwiches demanded.

Scenario 4.5: The Demand Curve for Grilled Cheese Sandwiches Has Been Estimated