Suppose rice and pasta are substitute goods in consumption. If new technology that lowers production costs has been found for rice and, at the same time, an earthquake has destroyed pasta making factories, what would happen in the pasta market? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Price falls and quantity rises. b Price rises and quantity rises. The change in price is ambiguous and quantity falls. d Price rises and the change in quantity is ambiguous.

Suppose rice and pasta are substitute goods in consumption. If new technology that lowers production costs has been found for rice and, at the same time, an earthquake has destroyed pasta making factories, what would happen in the pasta market? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. Price falls and quantity rises. b Price rises and quantity rises. The change in price is ambiguous and quantity falls. d Price rises and the change in quantity is ambiguous.

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.

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PQ 5.10
Suppose rice and pasta are substitute goods in consumption. If new technology that lowers production costs has been found for
rice and, at the same time, an earthquake has destroyed pasta making factories, what would happen in the pasta market?
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
Price falls and quantity rises.
b Price rises and quantity rises.
The change in price is ambiguous and quantity falls.
d
Price rises and the change in quantity is ambiguous.

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