Suppose people buy more of good A when the price of good B rises. These goods are: substitutes  compliments  inferior Normal

Q: Considering peanut butter and jelly as compliment goods, if demand of peanut butter decreases…

A: A good that is being used to add value to another good or could not be used without each other is…

Q: A decline in the price of good A causes the demand curve for good B to shift to the right.  We can…

A: The demand changes of one good related to the price changes of another good is known as the cross…

Q: In which case does the demand curve not shift? a. When there is a change in the price of a…

A: In a market, demand curve show two types of effects such that change in quantity demanded and change…

Q: When income rises by 10%, the demand for Good A rises by 20%.  From the above, we know Good A is a…

A: The demand for a normal good rise with a rise in the income level whereas the demand falls with the…

Q: Given the demand function of a certain good to be: Qp = 46+3Y - 4P %3D where Op, P, Y denote…

A: Normal good :- If demand and income has positive relationships . More demand of goods caused by high…

Q: If the price of X decreases and this decreases the demand for Y, then

A: If the quantity demanded of a commodity decrease due to change in the price of another commodity is…

Q: All else equal, which is steeper, the demand curve for a normal good or the demand curve for an…

A: In the case of a normal good, as income increases, the demand for the good also increases, but at a…

Q: Suppose X and Y are substitutes. If the price of Y increases, the demand for X will most likely…

A: Suppose X and Y are substitutes. If the price of Y increases, the demand for X will most likely…

Q: The demand for private jets (x) is given by QD = 20 – (px/y) + py where px is the price of jets, py…

A: Price elasticity of demand helps us to measure the change in consumption of a product in relation to…

Q: Review price elasticity of demand and supply.  Price elasticity describes the sensitivity between…

A: The substitution effect is caused by a rise in the price of a good and service. The income effect is…

Q: A consumer buys two goods X and Y. Suppose price of Good X falls. What will be its effect on its…

A: # The consumer will work accordingly to the law of demand which means if price falls then the demand…

Q: What term is used to describe goods that can replace each other to some extent, so that a rise in…

A: Substitute goods: 2 goods X and Y are substitutes if price of good X and demand for good Y are…

Q: The demand of normal good rises when the income of consumer is rising True/False

A: In a market, goods are classified as normal good, inferior good, Giffen good, and so on.

Q: When The price of good X falls then the demand for Good Y rise.  State where Good X and Good Y are…

A: # substitute goods are those goods which can be used on place of each other and on the other hand…

Q: Match tne explanation for why people buy more at lower prices with the proper term. Substitution…

A: Quantity demanded refers to the quantity of associate item or service that customers demand…

Q: Using the following concepts, explain why price and quantity demanded have an inverse relationship.…

A: We have inverse relationship between price and quantity demanded.

Q: If a price decrease leads to a decrease in consumer expenditure on the good, then demand must be…

A: The price elasticity is calculated as the percentage change in quantity demanded divided by the…

Q: If a good is an "inferior good", then people feel inferior when they buy it people buy less of this…

A: Inferior goods refer to those goods which demand decreases due to rise in individual income and…

Q: Which of the following statements could explain why demand curves slope downwards? O Most goods are…

A: Learning about how both demand and supply connect may help authorities achieve targeted outcomes for…

Q: Two goods are complements if a decrease in the price of one good   A) decreases the quantity…

A: Complementary goods are specific types of goods that are used together or enhance each other’s value…

Q: True of false ( explain the why) Percentage an increase in the price of good Y is 40% causes a…

A: In an economy, products are related to each other as the change in the price of one commodity will…

Q: If the quantity demanded of good X decreases, then: *

A: A consumer's desire to buy products and services, as well as their willingness to pay a price for…

Q: If two goods are substitutes, what happens if there is a decrease in the price of one good?…

A: Substitute goods are known or considered to be as those goods which are alternative and which can be…

Q: The figure illustrates the effect of a decrease in the price of good B on the utility-maximizing…

A: Indifference curve An indifference curve refers to a combination of two goods that provide the same…

Q: For a particular good, a 2% increase in P causes a 12% decrease in Q demanded. Which of these…

A: Along with the original price and demand, a change in the amount wanted and a change in price are…

Q: Demand curves are generally downsloping.  Using a good of your own choosing as an example, fully…

A: Demand shows the relationship between the price of the product and quantity demanded. As the price…

Q: The utility function of a consumer is given as follows. U(x, y) = x?y3. MU, = 2xy3 and MU, 3x?y2.…

A: It tells the inverse relation between quantity and price of the commodity.

Q: To maximize total utility, consumers will always choose the marginal unit of the good that yields…

A: Utility maximisation implied the concept that individuals and firms seek to get the highest…

Q: Q.2.2 Butter and margarine are substitutes in consumption. Explain how a decrease in the price of…

A: The goods which can be used in place of each other to satisfy a want are substitute goods and the…

Q: Consider the market for Asparagus. Green beans are a substitute for Asparagus. Asparagus is a normal…

A: A normal good is a kind of economic product that experiences an increase in demand as consumer…

Q: Consider two goods, X and Y. If the price of Y increases and, as a consequence, the demand curve for…

A: Substitute goods: If two goods are used for the same purpose by the consumers.  Complementary goods:…

Q: As the price of GOOD A increases by 20%, the quantity demanded of GOOD B increases by 10%. What is…

A: When the value of cross price elasticity is positive, it means that the two goods are substitutes…

Q: The demand for a good is QA=200+0.3I-PA+2PB, where QA is the quantity demanded of Good A, I is the…

A: Given  Demand for good A: QA=200+0.3I-PA+2PB               .... (1) PA and PB are the prices for…

Q: Give an example of a normal good. What will happen to the demand for normal goods if your income…

A: A good can be either normal or inferior. If a good is positively related to a consumer's income,…

Q: sider two goods that are perfect substitutes such that four (4) units of good X always provide the…

A: Substitute goods refer to the goods which are used for each other. Both are competitors , when price…

Q: When the price of a good increased by 2%, the quantity demanded of it decrease 10% does this have…

A: A substitute good in economics is a thing or service that can be used in lieu of another good or…

Q: Agree or disagree, if both coffe and tea are normal goods and the price of coffe increase, it will…

A: Normal goods are those goods which have positive relationship with the income of consumers.

Q: The price of goods A and B are 20 and 10 respectively. given that the marginal utility of commodity…

A: Marginal utility is the extra utility experienced with the consumption of an additional unit of a…

Q: Sugar is a normal good. You observe that both the equilibrium price and quantity of sugar have risen…

A: The statement that is most compatible with the finding that both the equilibrium price and amount of…

Q: Consider two markets: the market for waffles and the market for pancakes. The initial equilibrium…

A: The price elasticity of supply refers to a metric that is used to evaluate the responsiveness of the…

Q: Inferior goods are best defined as      A) goods that only those who are relatively poor purchase.…

A: Inferior goods are defined as those goods whose demand has an inverse relationship with the income…

Q: Consider a market with two goods, x and z. The consumer’s utility function is U = x^0.2z^0.8 A.…

A: Utility denotes the want satisfying power of a commodity. A consumer maximizes his/her utility when…

Q: Now suppose that the good is an inferior good. Would the demand schedule still be valid for an…

A: Inferior goods: - if the quantity demanded of good decreases with the increase in consumer’s income,…