d. The price of good A falls. This causes an increase in the price of good B.  Therefore, goods A and B are complements.

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter3: Demand And Supply
Section: Chapter Questions
Problem 4SCQ: Many changes are affecting the market for oil. Predict how each of the following events will affect...
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PLEASE SOLVE THE PART D

Do you agree or disagree with each of the following statements?  Briefly explain your answers and illustrate each with supply and demand curves.

 

a. The price of a good rises, causing the demand for another good to fall. Therefore, the two goods are substitutes.

 

b. A shift in supply causes the price of a good to fall. The shift must have been an increase in supply.

 

c. During 2009, incomes fell sharply for many Americans. This change would likely lead to a decrease in the prices of both normal and inferior goods. 

 

d. The price of good A falls. This causes an increase in the price of good B.  Therefore, goods A and B are complements.

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