Question #2: Historical data suggest that wine consumption per capita in the State of New York is: 0.7*Price of Wine + 3.8*Income 1.0*Price of Beer Wine where Wine is gallon of wine per capita, Price of Wine and Price of Beer are prices of wine and beer, respectively, and Income is nominal income per capita. All variables are expressed as percentage changes year-over-year. .Explain the demand behavior of wine drinkers in New York. Do these consumers follow the law of demand? Why or why b. not? The New York government was considering allowing supermarkets to sell wines. Lobbyists argue that the proposed law would help the local governments to balance their budgets. The argument is that the wine prices will fall, people will buy governments have more tax revenues. Giving the above estimated demand function, do you support their argument? In addition, the local governments knew that wines and beers are somewhat substituted C. more wines and consequently local

Question #2: Historical data suggest that wine consumption per capita in the State of New York is: 0.7Price of Wine + 3.8Income 1.0*Price of Beer Wine where Wine is gallon of wine per capita, Price of Wine and Price of Beer are prices of wine and beer, respectively, and Income is nominal income per capita. All variables are expressed as percentage changes year-over-year. .Explain the demand behavior of wine drinkers in New York. Do these consumers follow the law of demand? Why or why b. not? The New York government was considering allowing supermarkets to sell wines. Lobbyists argue that the proposed law would help the local governments to balance their budgets. The argument is that the wine prices will fall, people will buy governments have more tax revenues. Giving the above estimated demand function, do you support their argument? In addition, the local governments knew that wines and beers are somewhat substituted C. more wines and consequently local

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter4: Labor And Financial Markets

Section: Chapter Questions

Problem 30P: Predict how each of the following economic changes will affect the equilibrium price and quantity in...

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