Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Question
Chapter 12, Problem 5MC
To determine
Acquiring complementary good.
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Students have asked these similar questions
f a decrease in price of good X decreases the demand for good Y, which of the following statements are true:
Good X and Good Y are substitutes
Good X is inferior
Good X and Good Y are complements
Good Y is inferior
When the price of one good affect the demand for another good, then the goods are likely to be ..........................
a)
substitute or compliment goods
b)
of the same price
c)
from different company
d)
of the same product
If the price of good X increases from RM3 to RM5, the quantity demanded drops from 10 to 8. Find the slope of the demand curve
A) 0.2
b) 5
c) -1
d) -2
Chapter 12 Solutions
Managerial Economics: A Problem Solving Approach
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- Which factor would result in a movement along the demand curve? Question 6 options: A) a change in preferences B) an increase in the number of buyers C) an increase in the number of suppliers D) a decrease in income One of these answers is CORRECT!! The last expert was wrong by saying that "none" are correct!! Please help!arrow_forwardIf a decrease in the price of product X causes the demand for product Z to decrease, then product Z is: Normal good Complementary good Substitute good Inferior good * Note that the answer is not complementary good.arrow_forwardSuppose that a 10 percent increase in the price of normal good Y causes a 5 percent decrease in the quantity demanded of normal good X. The coefficient of cross elasticity of demand is Multiple Choice negative, and therefore these goods are substitutes. positive, and therefore these goods are substitutes. negative, and therefore these goods are complements. positive, and therefore these goods are complements..arrow_forward
- As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 to 114 units. Are goods X and Y substitutes or complements? Group of answer choices Income elastic with an unknown elasticity Substitutes, however, demand is elastic Complements, however, demand is inelastic Substitutes, however, demand is inelastic Complements, however, demand is elasticarrow_forwardConsider two goods, X and Y. If the price of Y increases and, as a consequence, the demand curve for X shifts to the left, then: X and Y are substitutes. X and Y are complements. X and Y are unrelated. X and Y are inferior goods.arrow_forwardAssume that good Z is an inferior good for a consumer. If the consumer's income increases, thenA. the supply of good Z will increase.B. the supply of good Z will decrease.C. the demand of good Z will increase.D. the demand of good Z will decrease.arrow_forward
- Which of the following product pairs would you expect to be substitutes, and which would you expect to be compliments? Shoes and sneakers Gasoline and sport-utility vehicles Bread and butter Instant camera film and regular camera fill For each of the product pairs given in Test Yourself Question 4, what would you guess about the products’ cross elasticity of demand? Do you expect it to be positive or negative? Do you expect it to be a large or small number? Why?arrow_forwardMotivate, with the aid of examples, the type of goods diagram A and diagram B are, if: (Using attached diagrams) 1 The cross price elasticity of demand is negative 2 The cross price elasticity of demand is positivearrow_forwardexplain the difference between the following: complements and substitutes in production complements in production (or consumption) inputs in production understand the implications of those differences for changes in demand the two bullet points have already been answered but I added them for clarification as it got rejected when I asked about inputs in production seperatelyarrow_forward
- Suppose X and Y are substitutes. If the price of Y increases, the demand for X will most likely _______, and the quantity demanded of X will also _______. 1) increase, increase 2) increase, decrease 3) decrease, increase 4) decrease, decrease 5) None of the above.arrow_forwardIf two commodities are substitutes, a change in the price of the one, ceteris paribus, cause a change in the quantity purchased of the otherarrow_forwardRising peanut prices have forced peanut butter makers to raise the price of peanut butter from $2 to $3 per jar, causing quantity demanded to fall. In addition, sales of jelly also dropped by 15%. Soon thereafter, makers of chocolate spread dropped its price from $4 to $3 per jar. This resulted in a further decline in peanut butter sales by 20%. What is the cross elasticity of demand between peanut butter and jelly (use the midpoint method)? Are these two products complements or substitutes?arrow_forward
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