13. If the demand for tires goes down when the price of gas goes up, then tires

Question

13. If the demand for tires goes down when the price of gas goes up, then tires and gas A) substitutes. B complements. are: both expensive. D) both inexpensive 14. An inferior good is one for which A) an increase; an increase in demand B) an increase; an increase in quantity demanded increase in demandin buyers' income causes an increase; a decrease in demand ) a decrease; a decrease in demand 15. An increase in supply of a good is caused by A) input prices rising. B) a fall in the price of the good. an increase in the number of sellers. expectations of future price increases. Use the following to answer question 16. Figure: Supply of Coconuts Price of coconuts S3 S1 S2 Quantity of coconuts

Explanation / Answer

13. When price of good X and demand for good Y are inversely related, they are said to be complementary goods.

OPTION B

14. OPTION C

15. Current supply is actually decreased when input prices rise, price of goods fall or when prices in future are expected to rise. Only the increase in number of sellers would increase the supply now.

OPTION C

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