Question

1.A decrease in the price of a good that buyers see as a complements will lead to a/an

(i.e., What will a decrease in the price of salsa do in the market for tortilla chips IF buyers see them as complements and like to consume them together?)

-Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price

-Decrease in Supply, a decrease in equilibrium quantity, and an increase in equilibrium price

-Increase in Demand, an increase in equilibrium quantity, and an increase in price

-Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

2.If we are talking about "inferior goods," an increase in income will lead to a/an

-Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price

-Decrease in Supply, a decrease in equilibrium quantity, and an increase in equilibrium price

-Increase in Demand, an increase in equilibrium quantity, and an increase in price

-Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

3. if we are talking about "normal goods," a decrease in income will lead to a/an

-Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price

-Decrease in Supply, a decrease in equilibrium quantity, and an increase in equilibrium price

-Increase in Demand, an increase in equilibrium quantity, and an increase in price

-Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

4.If we are talking about "inferior goods," a decrease in income will lead to a/an

-Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price

-Decrease in Supply, a decrease in equilibrium quantity, and an increase in equilibrium price

-Increase in Demand, an increase in equilibrium quantity, and an increase in price

-Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

5.A decrease in input costs will lead to a/an

-Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price

-Decrease in Supply, a decrease in equilibrium quantity, and an increase in equilibrium price

-Increase in Demand, an increase in equilibrium quantity, and an increase in price

-Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

6.If when we increase the price of a product by 10%, the percentage change in quantity demanded is -20%, which is true?

-Price elasticity of demand will be -1/2. A 1% increase in price will lead to a 1/2 % drop in quantity demanded. Demand is Inelastic.

-Price elasticity of demand will be -2. A 1% increase in price will lead to a 2% drop in quantity demanded.  Demand is Inelastic.

-Price elasticity of demand will be -1/2. A 1% increase in price will lead to a 1/2 % drop in quantity demanded.  Demand is Elastic.

-Price elasticity of demand will be -2. A 1% increase in price will lead to a 2% drop in quantity demanded.  Demand is Elastic.

Answer 1

1.

Answer : Increase in Demand, an increase in equilibrium quantity, and an increase in price

A decrease in the price of a complement is a demand determinant. This would lead to an increase in the demand for tortilla chips, increasing equilibrium price and quantity.

2.

Answer: Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price

An inferior good is one whose demand falls when income increases and whose demand increases when income falls. Examples are supermarket branded foods.

3.

Answer: Decrease in Demand, a decrease in equilibrium quantity, and a decrease in price. Consumer income is a demand determinant. If consumer income falls than demand will falls. Equilibrium price and quantity will fall.

4. Answer: Increase in Demand, an increase in equilibrium quantity, and an increase in price. An inferior good is one whose demand falls when income increases and whose demand increases when income falls.

5.

Answer: Increase in Supply, an increase in equilibrium quantity, and decrease in equilibrium price, Cost of production will fall and supply curve will shift to the right.