4. Megan usually buys Crunchy Corn cereal at the grocery store. However, when the price of cereal instead, which costs $2.50 a box. Crunchy Corn and Wheaty Wheels cereals are Crunchy Corn goes from $2.50 a box to $3.25 a box, Megan decides to buy Wheaty Wheels which of the following? A. surplus goods B. equilibrium goods C. complementary goods D. substitute goods

4. Megan usually buys Crunchy Corn cereal at the grocery store. However, when the price of cereal instead, which costs $2.50 a box. Crunchy Corn and Wheaty Wheels cereals are Crunchy Corn goes from $2.50 a box to $3.25 a box, Megan decides to buy Wheaty Wheels which of the following? A. surplus goods B. equilibrium goods C. complementary goods D. substitute goods

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Normal and Inferior Goods

Understanding a normal good and an inferior good is important because it tells us what will happen to demand different products during booms and recessions.

Question

4. Megan usually buys Crunchy Corn cereal at the grocery store. However, when the price of
cereal instead, which costs $2.50 a box. Crunchy Corn and Wheaty Wheels cereals are
Crunchy Corn goes from $2.50 a box to $3.25 a box, Megan decides to buy Wheaty Wheels
which of the following?
A. surplus goods
B. equilibrium goods
C. complementary goods
D. substitute goods

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2. Julian buys plants and flowers every month. Both are normal goods. When the price of flowers fell, Julian purchased fewer plants. Explain what the income effect and substitution effect predict when the price of flowers falls. Which effect was stronger for Julian?
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Question 3