1. You are given the following data showing price and quantity demanded for an economics textbook, where price is the independent variable and quantity demanded is the dependent variable:

PriceQuantity Demanded

$25500

35300

45200

50400

(a)Develop the regression line to explain the relationship between price and quantity demanded.

(b)Based on the above, interpret the slope of the regression line.

(c)If the price of the textbook increases by $15, explain the impact on quantity demanded.

2.With the fall in consumer income in The Bahamas and compounded by the novel coronavirus, there has been a decline in fine dining. In this scenario, the income of a consumer fell from $40,000 per annum to $20,000 between the period March 31, 2020, and April 1, 2021. Over that same corresponding period, the demand for fine dining changed from 120 to 30. Calculate the income elasticity of demand and interpret the results.