Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 3, Problem 15CQ
To determine
The difference between substitutes and complement goods.
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Students have asked these similar questions
True or False? Two normal goods cannot be substitutes for each other. Illustrate.
Suppose that you discover that, ceteris paribus, when the price of tomatoes increases, the demand for bleu cheese decreases. From this you conclude that:
tomatoes and blue cheese are substitutes.
tomatoes are inferior goods and blue cheese is a normal good.
tomatoes and blue cheese are complements.
the demand curve for tomatoes has shifted to the left.
Suppose that the price of good A increases, the demand for good B increases. This shows that good A and good B are
substitute goods
complement goods
not related
Chapter 3 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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- According to a recent study, "Stricter college alcohol policies, such as raising the price of alcohol, or banning alcohol on campus, decrease the number of students who use marijuana." On the basis of this information, how would you describe alcohol and marijuana? They are both luxury goods. There is no relationship between the two goods. The two goods are substitutes in consumption. The two goods are complements in consumption.arrow_forwardPeanut butter and jam can be either substitutes or it can be compliments. Caitlin likes peanut butter and she likes jam, but you do not know if Caitlin regards these products as substitutes or as compliments. Which of the following is true? A. If the price of peanut butter decreases and the quantity of jam Caitlin demanded increases, then Caitlin regards it as substitutes. B. If the price of jam increases and the quantity of peanut butter Caitlin demanded increases, then Caitlin regards it as compliments. C. If the price of peanut butter increases and the quantity of jam Caitlin demanded increases, then Caitlin regards it as substitutes. D. If the price of jam decreases and the quantity of peanut butter Caitlin demanded decreases, then Caitlin regards it as compliments. E. If the price of peanut butter increases and the quantity of jam Caitlin demanded stays the same, Caitlin regards it as compliments.arrow_forwardTwo goods are substitutes if a decrease in the price of one good. This will lead to: Select one: a. reduces the quantity demanded of the other good b. increases the demand for the other good. c. increases the quantity demanded of the other good d. reduces the demand for the other goodarrow_forward
- Suppose that after your income increases, you consume less fast food. This means: Fast food is considered an inferior good. Coke and Pepsi are substitutes. Coke and fried chicken are complements. None of the above.arrow_forwardThe price of cake falls and as a result the demand for ice cream increases. What can we conclude? Cake and ice cream are inferior goods. The marginal value of ice cream is greater than the marginal value of cake. Cake and ice cream are complements. Cake and ice cream are substitutes.arrow_forwardGood B and Good A are substitutes. If the price of Good A rises, what will happen to the demand curve of Good B?arrow_forward
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