Chapter 8, Problem 3DQ

To determine

Natural gas produced by fraking is a substitute for some goods, i.e., the demand for these other goods falls when the price of natural gas falls. Nevertheless, natural gas is also a complement for other goods-heir demands rise when the price of natural gas falls. Identify at least two goods that are substitutes for natural gas and two that are complements. Considering both producers and consumers of those goods, analyze how they are either made better off or worse off as a result of the spread of fracking.

Concept Introduction:

It is the controversial drilling technique that pollutes the environment, hasten climate change, and ultimately makes everyone poor, not richer. It is another name for hydraulic fracturing process in which water sand and small amounts of chemicals are injected to break the rock apart.

Substitute Goods:

All those goods that can be used in the place of other goods are known as substitute goods. Example tea and coffee.

Complement Goods:

All those goods that are used together and cannot be used alone are known as complement goods. Example of petrol and car.