Question

11. Cameras and film are complements. If the price of cameras falls, ceteris paribus, a) The demand for cameras will increase. b) The quantity of film demanded will fall. c) The demand for film will rise d) The demand for film will fall. 12. When one moves along a demand curve, which of the following includes only variables that are assumed to be constant? Households' income, the price of the good, and tastes. a) b) Tastes, the number of buyers in the market, households' income, expectations, the quantity of the good demanded, and the price of the good c) Households' income, tastes, and the number of buyers in the market d) Households income, expectations, and the price of the good. 13. A freeze that destroys half of the coffee crop in South America would likely raise the price of coffee, a) reducing the demand for coffee and increasing the demand for tea. b) reducing the quantity demanded for coffee and increasing the demand for tea. c) reducing the demand for both coffee and tea. d) reducing the quantity demanded for both coffee and tea 68

Answer 1

11) c is correct

For complements decrease in price of one causes increase in demand for other.

12) c is correct

When there is a movement along the demand curve, only price and quantity demanded change. Everything else remain the same.

13) b is correct

When coffee crops are destroyed supply decreases that results in higher price and lower quantity demanded. Since coffee and tea are substitutes so demand for tea will rise.