3. (20 points) Your job is to analyze the demand for single family homes. The general functional form demand schedule for single family homes is:

Qd = Qd(Price, Price of Complements, Price of Substitutes, Income, Price Expectations, Income Expectations, Taxes, Subsidies, the Number of Buyers).

"Sign" the general functional demand schedule, and explain your signs.

Suppose an analysis of the housing market shows that the demand schedule can be written in specific functional form; that is:

Qd = 10 - .5P.

Answer the following questions?

A) What is intercept?

B) What is the economic meaning of the intercept?

C) What is the slope?

D) What is the economic meaning of the slope?

E) Suppose the price changes from $2 to $4, what is the change in quantity demanded?

F) How are the NPDs in the general functional form demand schedule reflected in the specific functional form demand schedule.

G) Suppose specific functional form demand schedule changes to Qd = 20 - .5P, provide three examples of changes in the NPDs that could explain that change in demand (that shift in the demand schedule).