1. If the demand curve for product A moves to the right, and the price of product B increases, it can be concluded that: A. A and B are substitute goods; B. A and B are complementary goods; C.A is an inferior good, and B is a superior good; D. Both goods A and B are inferior.
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- Two goods are substitutes if a decrease in the price of one good. This will lead to: Select one: a. reduces the quantity demanded of the other good b. increases the demand for the other good. c. increases the quantity demanded of the other good d. reduces the demand for the other good4. An increase in the price of gasoline will most likely cause the demand curve of tyres to change in which direction. A To the left, because gasoline and tyres are substitutes. B To the left, because gasoline and tyres are complements. C To the right, because gasoline and tyres are substitutes. D To the right, because gasoline and tyres are complements. E To the right, because an increase in the price of gasoline makes consumers poorer and thus not willing to pay as much for tyres. 5. For an inferior good, the quantity demanded A Does not change when income rises or falls. B Rises when income falls. C Falls when income falls. D Rises when income rises. E Responds directly to changes in income. 6. The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, then A The marginal product, the average product and total product of the variable factor will eventually decrease. B Total product will eventually begin…Suppose that tacos and pizza are substitutes, and that soda and pizza are complements. We would expect an increase in the price of pizza to: O reduce the demand for both soda and tacos. reduce the demand for soda and increase the demand for tacos. increase the demand for both soda and tacos. O reduce the demand for tacos and increase the demand for sodas.
- 6. How would an increase in income for an inferior good affect demand for the good? How would an increase in income for a cheap good affect the demand curve for that good? Show graphically.Two goods are complements if a decrease in the price of one good. This will lead to: Select one: O a. reduces the quantity demanded of the other good b. increases the quantity demanded of the other good. C. increases the demand for the other good d. reduces the demand for the other goodWhich of the ff. is correct with regards to the demand curve? A. If the price of the good increases, the demand curve for the good will shift to the left B. If the price of the good increases, the consumers have the incentive to look for substitutes, thus, the quantity demanded and its price are inversely related C. Income of the consumers is written on the vertical axis D. Varying preferences of the consumers is reflected in the demand curve and is written on the horizontal axis
- 3A .If the price of the good you are analyzing rises, how does this movement show up on the demand curve? What is the name of this movement? 3B. Give a personal example of an “inferior good”, and explain how you determined that this good is inferior for you.Which of the following is not a demand shifter? O The price of a substitute good. O The price of a complementary good. The number of buyers in the market. O The price of the product.Jiffy peanut butter and Smucker's Strawberry jam are considered to be complementary goods. Definitions: substitute goods, complementary goods Show how an increase in the price of Jiffy peanut butter affects the demand for Smucker's Strawberry jam. When the price of a related good changes, this will result in In particular, when the price of Jiffy peanut butter increases, the demand curve for Smucker's Strawberry jam will shift to the
- Motorcycles and bicycles are substitutes under demand. The following questionsrelate to the bicycle market. 1. Explain how a decrease in the price of motorcycles will affect the demandfor bicycles. 2. Draw a graph that supports the statement in Q.1 above.1. What information do we gain by isolating the income and substitution effects from each other when examining the effect of a change in price on consumption? How does this further help us understand the characteristics of normal and inferior goods? Using the concepts of the substitution and income effects, how would you define a Giffin good?In which case does the demand curve not shift? a. When there is a change in the price of a substitute good. b. When there is a change in the price of a complementary good. c. Both a) and b) are correct. d. When there is a change of the price of the good itself.