Question

3. Answer the following questions involving the determinants of both demand and supply as explained in chapter three: L Assume the demand for product X increases. This might be caused by A a change in consumer tastes that is unfavorable to X. B. a decline in the price of Z, provided that X and Z are substitute goods C. a decline in income, provided that X is an inferior good. D. an increase in the price of Y, provided that X and Y are compiementary goods. i. Suppose that goods A and B are close substitutes. If the price of good A rises, then we would expect a[n]: A. increase in the demand for A and an increase in the quantity of B demanded. B. decrease in the quantity of A demanded and an increase in the demand for B C. decrease in the demand for A and an increase in the quantity of B demanded D. increase in the demand for goods A and 8. ili. If farmers withhold some of their current corn harvest from the market because they anticipate a higher price of corn in the future, then this would cause aln) A. rightward shift in the supply of corn. B. decrease in the supply of corn. C. leftward shift in the demand for corn. D. increase in the demand for corn. v. An increase in the price of milk, used in the production of ice cream, will: A. decrease the supply of ice cream, causing the supply curve of ice cream to shift to the left. B. increase the supply of ice cream, causing the supply curve of ice cream to shift to the right. C. cause a downward movement along the supply curve of ice cream. D. have no effect on the supply of ice cream. By "close," we mean that neither good is markedly better (or more satisfying) than the other

Answer 1

1) C

Decline in the income when income of the increasing consumption of certain goods decline indicating the inferior goods when falling in the income result increase in the demand for inferior goods increase

2) B

Decrease the demand for good A and increase the demand for goods B because good B is substituted well for A which stiffy the same level of the satisfaction.

3) B

Leftward shift of the supply curve of the corn indicating supply is reduced in the market

4) A

Decrease the supply of the ice cream and leftward shift of the supply curve it indicates that cost of the production in ice cream making increased.