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
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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.
Transcribed Image Text: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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