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.
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.
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Do you agree or disagree with each of the following statements? Briefly explain your answers and illustrate each with
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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