Four questions about sheets and pillows. If the demand for linen sheets is a nor

Question

Four questions about sheets and pillows. If the demand for linen sheets is a normal good, what will be the effect of the recession on the demand for linen sheets? Same question as in part a. of this question, but the demand for linen sheets is an inferior good? If linen sheets are substitutes for satin sheets, and the price for satin sheets goes up. what happens to the demand for linen sheets (ceteris paribus)? Fans of country & western music will know a song made famous by Tammy Wynette: "Satin sheets to lie on. satin pillows to cry on." which is a sad tale about a woman who is very well off economically (i.e.. she has satin sheets, satin pillows, and also a Cadillac and wears tailor-made clothes) but she is not happy, for reasons explained in the song. In the language of economics, what would one call the relationship between satin sheets and satin pillows? If you do not care for country & western music, you may base your answer instead on tennis rackets and tennis balls or bread and butter.

Explanation / Answer

a.) Since it is a normal good, recession will lower its demand as people will not like to buy it. b.) Since its an inferior good as the income rises of the individuals the good become inferior to them and hence there is no longer any use of the good for them Thus its demand decreases if consumer income increases. c.) Since the two are substitutes and as the price of satin sheets goes up assuming the price of linen sheets remain the same (ceteris paribus) Hence people will buy more of linen sheet. d.) The above two are complimentary goods. One cannot do with by purchasing just one thing and has to buy another thing. For example one can buy tea but cannot prepare tea without milk. Tea and milk are complementary to each other. or sugar for that matter.

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