Question

The price of an input needed to produce good A falls. As a result, the demand...

The price of an input needed to produce good A falls. As a result, the demand for good B shifts to the left. From this we can infer that:

Select one:

A. none of the other choices is correct

B. good A is used to produce good B.

C. goods A and B are substitutes.

D. good A is used to produce good B.

E. goods A and B are complements.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When price of an input needed to produce good A falls, it reduces the production cost of good A. As a result, supply of good A increases, shifting the supply curve for good A rightward.

As a result, price of good A decreases. When price of good A decreases, quantity demanded for good A will increase, according to the law of demand. If it causes demand for good B to shift to the left, that is demand for good B decreases, it means these two goods are substitute (substitute goods are goods that are used in place of the other) of each other.

Answer: option C

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If the demand for one good increases as the price of another good increases, how would...
If the demand for one good increases as the price of another good increases, how would we label the relationship between these goods? The two goods are demand complements; The cross-price elasticity of demand is negative between the two goods The two goods are demand substitutes; The cross-price elasticity of demand is negative between the two goods. The two goods are demand complements; The cross-price elasticity of demand is positive between the two goods. The two goods are demand substitutes;...
Which of the following would result in a leftward shift in the supply curve for good...
Which of the following would result in a leftward shift in the supply curve for good X can be         attributed to        a. an increase in the price of an input used in the production of the good X.        b. an increase the price of a substitute good in production.        c. an increase in the price of good X.        d. an increase in the price of a complementary good in production.        e. more than one of these choices Which of the...
1) The income elasticity of demand for Good Z is –0.2, while the cross-price elasticity of...
1) The income elasticity of demand for Good Z is –0.2, while the cross-price elasticity of demand between Good Z and Good Y is 1.63. Which of the following statements is correct regarding Good Z? Group of answer choices Good Z is a inferior good, and Goods Z and Y are complements. Good Z is an inferior good, and Goods Z and Y are substitutes. Good Z is a normal good, and Goods Z and Y are complements. Good Z...
Suppose that when the price of good A rises from $18 to $20, the quantity demanded...
Suppose that when the price of good A rises from $18 to $20, the quantity demanded of good B falls from 30 units to 20 units. Using the midpoint method, the cross-price elasticity of demand is Select one: a. -0.26, where goods A and B are complements. b. -0.26, where goods A and B are substitutes. c. -3.8, where goods A and B are complements. d. -3.8, where goods A and B are substitutes.
When the price of good A rises, the supply curve of good B shifts rightward. Which...
When the price of good A rises, the supply curve of good B shifts rightward. Which of the following statements are true? A) A and B are substitutes. B) A and B are complements. C) A and B are substitutes in production. D) A and B are complements in production. E) A is a factor used in the production of B.
40) The cross elasticity of demand for butter and margarine is likely to be A) positive...
40) The cross elasticity of demand for butter and margarine is likely to be A) positive because they are substitutes. B) positive because they are complements. C) negative because they are substitutes. D) negative because they are complements. E) positive because they are normal goods. 41) If an increase in the price of green ketchup increases the demand for red ketchup, then A) red and green ketchup are substitutes. B) red and green ketchup are normal goods. C) the cross...
The cross elasticity of demand for good A and good B is minus−0.7. This means that  ...
The cross elasticity of demand for good A and good B is minus−0.7. This means that   A. if the price of good A increases by 10​ percent, the quantity demanded of good B decreases by 7 percent. B. the goods are substitutes. C. if the price of good A increases by 10​ percent, the quantity demanded of good B increases by 7 percent. D. the goods are complements. E. both A and D are correct.
One reason that the quantity demanded of a good increases when its price falls is that...
One reason that the quantity demanded of a good increases when its price falls is that the A. price decline shifts the supply curve to the left. B. lower price increases the real incomes of buyers, enabling them to buy more. C. lower price shifts the demand curve to the left. D. lower price shifts the demand curve to the right.
The cross-price elasticity of demand between good A and good B is positive. Are good A...
The cross-price elasticity of demand between good A and good B is positive. Are good A and good B complements or substitutes?
1. When the price of Good 1 changed from $80 per unit to $40 per unit,...
1. When the price of Good 1 changed from $80 per unit to $40 per unit, demand for Good 2 changed from 6000 units to 10,000 units. Calculate the appropriate elasticity. You will interpret your findings in the next question.Enter only numbers, a decimal point, and/or a negative sign as needed. Round your answer to two decimal places as necessary; if you round on intermediate steps, use four places. 2. You must select all correct answers to get points for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT