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# What are complement goods. State two examples.
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- With the help of a well labeled diagram, show and explain; How the substitution effects explain the law of demand4. Suppose that a decrease in the price of X results in more of good Y sold. What are X and Y called? a. complementary goods b. normal goods c. inferior goods d. substitute goodsThe law of diminishing marginal utility helps to explain the direct relationship between price and quantity supplied. a. True b. False
- The following graph shows Dmitri's weekly demand for pizza, represented by the blue line. Point A represents a point along his weekly demand. The market price of pizza is $3.00 per slice, as shown by the horizontal black line. Dmitri's Weekly Demand 7.50 6.75 6.00 5.25 Demand 8, 3.75 4.50 3.75 Price 3.00 2.25 1.50 0.75 0 2 4 8 10 12 14 16 18 20 QUANTITY (Slices of pizza) PRICE (Dollars per slice). Suppose that AT&T and Verizon cell phone plans are considered substitutes. Ceteris paribus, if there is a decrease in price of AT&T without any change in price of Verizon how would economists show the effect on demand curves for both AT&T and Verizon? Show on the following graphsDon't use Ai True or False: The law of demand states that, all else being equal, as the price of a good or service increases, the quantity demanded for that good or service will decrease.
- Mario and Chris are the only two consumers in a particular market for train tickets. The following table displays the relationship between the price of bus tickets for each consumer and quantity of train tickets demanded per week when the price of train tickets is $4.00 each. $2.00 $3.00 $4.00 $5.00 Price of bus tickets Mario's demand for train tickets 8 6. 4 2 Chris' demand for train tickets 1 2 3 a) Suppose the price of bus tickets is $4. The market demand of train tickets per day isWhich of the following would cause a shift in the demand curve from point A to point B? OA. An increase in the price of a substitute good. B. A decrease in income (inferior good). C. An increase in income (normal good). D. All of the above.II. The Law of Supplya. In wordsThe Law of Supply states that quantity (demanded/supplied) goes (down/up) as theprice goes (down/up), all other things (equal/moving).Hence, the relationship between quantity demanded and price is (direct/inverse).
- QUESTION 11 Jennifer, an accountant, is promoted at the company she works for. Therefore, her salary increases. We would expect Jennifer's demand for a. all the goods she purchases to remain unchanged. b. normal goods to decrease. C. inferior goods to decrease. d. substitute goods to increase. O a d. QUESTION 12 If Andrea's boss informs her that she will get a salary increase next month. Then a. her demand for all goods will increase next months b. her demand for normal goods will increase next months C. her demand for normal goods increases now d. her demand for all goods increases now O a O d a all gnswers. ОООО20. A drop in the price of a commodity A shifts the demand curve for commodity B lettwiras. Fromthat you know that commodity A and B are: 2. inferior goods O substitutes a. complements d. normal goods3. Individual and market demand Suppose that Andrew and Beth represent the only two consumers of blueberry muffins in some hypothetical market. The following table presents their weekly demand schedules for blueberry muffins: Price (Dollars per muffin) 1 2 3 4 5 Andrew's Quantity Demanded Beth's Quantity Demanded (Muffins) (Muffins) 6 16 3 2 1 0 12 8 6 4 On the following graph, plot Andrew's demand for blueberry muffins using the green points (triangle symbol). Next, plot Beth's demand for blueberry muffins using the purple points (diamond symbol). Finally, plot the market demand for blueberry muffins using the blue points (circle symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right.