In exercise 7.19, among other things, you were asked to consider the following demand function for chicken:

In Y, = fa + fa In X2t + fa In X3, + fa, In X,, + fa In X5t + u,

where Y = per capita consumption of chicken, lb, X2 = real disposable per capita income, $, X3 = real retail price of chicken per lb, 0, X4 = real retail price of pork per lb, 0, and X5 = real retail price of beef per lb, 0.

In this model fa, fa, p4, and fa are, respectively, the income, own-price, cross-price (pork), and cross-price (beef) elasticities. (Why?) According to economic theory,

fa > 0

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Rules Of The Rich And Wealthy

Rules Of The Rich And Wealthy

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