The Demand for Lamp UK consumption oftamb: IBM2004 14o 130 120 110 8 Grarnswwsnnparwaok 838 S 30 II|IIIIII I lllllll III I 19741933 191819001932198419301819901992199419961993 2000 2032 200d The diagram shows what happened to the consumption of lamb in the UK over the period 1974-2004. How can we explain this dramatic fall in consumption? One way of exploring this issue is to make use of a regression model, which should help us to see which variables are relevant and how they are likely to affect demand. The following is an initial model tted (using the Microt statistical software package) to annual data for the years 19?42004. QL = 170.2 - 0.19TPL - 0.069Pa + 0.280Pp - 0.0094Y (1) where o QL is the quantity of lamb sold in grams per person per week; 0 PI. is the 'real' price of lamb (in pence per kg, 1985 prices); P3 is the 'real' price of beef (in pence per kg, 1985 prices); Pp is the 'real' price of pork (in pence per kg, 1985 prices); 0 Y is households' real disposable income per head { per year, 2002 prices). Question 1: {25 points) This model makes it possible to predict what would happen to the demand for lamb if any one of the four explanatory variables changed, assuming that the other variables remained constant. Using equation (1), calculate what would happen - ceteris paribus - to the demand for lamb if: the real price of lamb went up by 10p per kg; the real price of beef went up by 10p per kg; the real price of pork fell by 10p per kg; real disposable income per head rose by 100 per annum. so?! Are the results as you would expect