Consider the following cases. a. If the prices of beacon rises, and as a result

Question

Consider the following cases.

a. If the prices of beacon rises, and as a result the demand for sausages increases, this implies that these two goods are_____________? (Complements/ Substitutes/ Unrelated)

b. If the price of tennis recquets falls, and as a result the demand for tennis balls___________ (Decreases/ Increases/ Stays unchanged), this implies that these two goods are complements.

c. If the price of coffee rises, and as a result the demand for sugar falls, this implies that these two goods are__________? (Complements/ Substitutes/ Unrelated)

d. If the price of automoblies___________(Falls/ Rises/ Stays the same), and as a result the demand for motorbikes falls, this implies that these two goods are substitutes.

Explanation / Answer

a. substitutes
b. increases

c. complements
d. falls

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