Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 3, Problem 15CQ
To determine

The difference between substitutes and complement goods.

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Identify the two goods which are substitutes.     Good X and Good Y     It is not possible to distinguish any relationship among the goods.     Good Y and Good Z     Good X and Good Z
Suppose that you discover that, ceteris paribus, when the price of tomatoes increases, the demand for bleu cheese decreases. From this you conclude that:     tomatoes and blue cheese are substitutes.     tomatoes are inferior goods and blue cheese is a normal good.     tomatoes and blue cheese are complements.     the demand curve for tomatoes has shifted to the left.
When there is a change in the price of a related good, demand increases or decreases depending on the relationship between the two goods. Two economic terms describe these two relationships-substitutes and complements. An increase in the price of Good A increases demand for Good B when the two goods are substitutes. An increase in the price of Good A decreases demand for Good B when the two goods are complements.The graph shows the shift in the demand for good B when the price of good A increases depending on whether the two goods are substitutes or complements. Pick from the bold choices below. pls look at the graph.  In Mexico, NAFTA had the result of lowering the price of used cars. Consider the effect of the price of used cars on the demand for new cars in Mexico. When the price of used cars in Mexico fell the Mexican demand for new cars (Increase or decrease). This would cause the new car demand curve in Mexico to (Shift right or shift left). The price of new cars in Mexico would…
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