Homework Answers
Answer - A. It decreases the demand for corn chips.
As per the question consumers are consuming corn chips with salsa. It otherwise means salsa and corn chips are used jointly. These type of goods are called as complementary goods. Complementary goods are those that are to be used at a time jointly or it is to be used together. Complementary goods usually has a negative cross elasticity of demand. It implies that when the price of one complementary good increases, the demand for another complementary good decreases.
Therefore, when the price of salsa increased, the demand for corn chips will decrease.
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Chile is an importer of computer chips, taking the world price
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A.
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B.
The price of chips in Chile increases to $19; the quantity of
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