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.

Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
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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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