Part I: TFUS Determine whether each of the following statements are true, false,

Question

Part I: TFUS Determine whether each of the following statements are true, false, or u why. Points will be given entirely based upon your justification. certain, and explain 1. Suppose a new innovation increases the tread life of automobile tires. Ceteris paribus 2. If the price of orange juice (a substitute for apple juice) increases at the same time a this innovation will decrease the number of tires purchased in the market. new fungus infects a portion of US apple orchards, we can expect the price of apple

Explanation / Answer

1. True. As the life of the tires increases the replacement rate decreases and hence purchases of new tires decreases.
2. True. With the fungus attack, the quantity supply of apple decreases and hence the price increases

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