Directions: Analyze and compute problems. Write your answer on the answer sheet provide 1. An individual consumer's monthly demand for downloadable e-books is given by the equation Qdeb = 2-0.4peb +0.00051 +0.15Phb where Queb equals the number of e-books demanded each month, Peb equals the price of e-books, I equals the household monthly income, and Phab equals the price of hardbound books, per unit. Notice that the sign on the price of hardbound books is positive, indicating that when hardbound books increase in price, more e-books are purchased; thus, according to this equation, the two types of books are substitutes. Assume that the price of e-books is €10.68, household income is €2,300, and the price of hardbound books is €21.40. I Determine the number of e-books demanded by this household each month. 2 Given the values for I and Phb, determine the inverse demand function. 3 Determine the slope of the demand curve for e-books.

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