I need feedback on my below Reponses (1-5), there are supposed to be expectations.

Several variables are important in determining gasoline demand. First and foremost, of course, is the own - price of gasoline. Also important are income, prices for cars (gasoline and cars are complements), and prices of substitutes for cars (public transportation). The variables are defined as follows:

Q_G^d = total quantity demanded for gasoline, measured in billions of gallons,

P_G = own-price of gasoline, as measured by the price index for gasoline,

M = per capita real disposable income,

P_nc = price index for new cars,

P_uc = price index for used cars,

P_pt = price index for public transportation.

Thus, the general form is:

Q_G^d =(P_G, M, P_nc, P_uc, P_pt).

1. Do you expect P_G, M, P_nc, P_uc, and P_pt to be positively or negatively related to Q_G^d? Explain. (Note: your expectations may not be matched by your regression results later on!) (5 points)

+ or - Brief Explanation/Reasoning based on Demand Theory

(a) P_G: The own price of gasoline will be negatively related to total gasoline consumption due to the law of demand.

(b) M: Per capital real disposable income, so when M increases people will spend more on gasoline making it a positive.

(c) P_nc: The price in new cars which means when it falls, demand for new cars will increase. Making PUC and QGD are negatively related.

(d) P_uc: Is the price index of used cars when Puc falls demand for used cars increase and therefore gasoline demand will increase making it a negative.

(e) P_pt: Ppt is the price for public transportation when ppt increases the cost of traveling in the public transportation system increases. This will lead to a fall in demand for public transport and an increase in the use of private vehicles this will cause a higher gasoline consumption demand.