John and Mary argue that if income increases by 1% and the quantity demanded of good x increases by 0.5%, then good x can be described as a (1) Necessity good. (2) Luxury good. Giffen good.
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- If the quantity demanded of good X decreases, then: *The income of consumer has got increased and the consumer's demand for good X has also increased. What type of good is good X?If an increase in income leads to an increase in the demand for sushi, then sushi is a normal good. a neutral good. a complement. a necessity.
- Peanut 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.What are the influences on buying plans that change demand, and do these influences increase or decrease demand? Complete the following question about a change in demand. The graph shows a demand curve for coffee makers. Draw a demand curve that shows what happens in the market for coffee makers if incomes increase and a coffee maker is a normal good, but all other influences on buying plans remain the same. Label the curve D₁. When an event occurs that changes the demand for coffee makers, and _____if demand decreases. O A. a movement up along the demand curve occurs; a movement down along the demand curve occurs О в. the demand curve shifts rightward; the demand curve shifts leftward C. the demand curve shifts leftward; the demand curve shifts rightward if demand increases OC O D. a movement down along the demand curve occurs; a movement up along the demand curve occurs E 24 20- 16- 12- 8- Price (dollars per coffee maker) Po Quantity (millions of coffee makers per year) >>> Draw only…When Sam has an income of 1.000 , he consumes 30 units of good A and 50 units of good B After Sam's income increases to $1,500 , he consumers 60 units of good A and 40 units of good B. Which of the following statements is correct ? a- Good A is a normal good and good B is an inferior good b- Both goods A and B are inferior goods c- Good A is an inferior good, and good B is a normal good d- Both goods A and B are normal goods
- The law of demand states thatA) a decrease in the price of a good shifts the demand curve leftward.B) other things remaining the same, the higher the price of a good, the smaller is the quantitydemanded.C) other thing remaining the same, the higher the price of a good, the larger is the quantitydemanded.D) an increase in the price of a good shifts the demand curve leftward.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.Suppose a decrease in consumer's income causes a decrease in the demand for sausage and an increase in the demand for cheese. Which good is an inferior good and high is normal explain your answer
- True or False? Two normal goods cannot be substitutes for each other. Illustrate.Two students, Nick and Sofia, are discussing normal and inferior goods. Nick says that if Frodo buys more beer when the price of beer goes up, then beer must be an inferior good for Frodo. If, on the other hand, he buys less beer when the price of beer goes up, then beer must be a normal good for Frodo. Sofia disagrees: "Normal and inferior goods are about income changes, not price changes. Therefore, we do not have enough information: beer could be an inferior or normal good in either of these cases." Do you agree or disagree? Carefully explain your point of view. Support your argument with graphs of income, substitution and total effects (please put beer on the horizontal axis and the other goods on the vertical axis). Please assume that Frodo's preferences over beer and other goods are strictly convex and satisfy "more is better" assumption.Distinguish between an inferior good and a normal good. Is a good which is inferior for one consumer also inferior for all the consumers? Explain.
