Four questions about sheets and pillows. If the demand for linen sheets is a nor

Question

Four questions about sheets and pillows. If the demand for linen sheets is a normal good, what will be the effect of the recession on the demand for linen sheets? Same question as in part a. of this question, but the demand for linen sheets is an inferior good? If linen sheets are substitutes for satin sheets, and the price for satin sheets goes up. what happens to the demand for linen sheets (ceteris paribus)? Fans of country & western music will know a song made famous by Tammy Wynette: "Satin sheets to lie on. satin pillows to cry on," which is a sad tale about a woman who is very well off economically (i.e.. she has satin sheets, satin pillows, and also a Cadillac and wears tailor-made clothes) but she is not happy, for reasons explained in the song. In the language of economics, what would one call the relationship between satin sheets and satin pillows? If you do not care for country & western music, you may base your answer instead on tennis rackets and tennis balls or bread and butter.

Explanation / Answer

6a Normal goods mean goods that go down in demand as people lose income. Thus if the demand for linen sheets is a normal good the demand for linen sheets will decrease in times of a recession. b Inferior goods mean goods that go up in demand as people lose income. Thus if the demand for linen sheets is an inferior good the demand for linen sheets will increase in times of a recession. c People are willing to buy linen sheets instead of satin sheets. Therefore if the price of satin sheets goes up and people are willing to switch to linen sheets. Thus, there is an increase in demand. d Goods that tend to be bought together are called complements. Bread and butter. Computers and mice. Etc.

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