Question

A change in technology used in the production of a good or service causes a change...

A change in technology used in the production of a good or service causes a change in (BLANK).

An increase in price causes a(n) (BLANK) in quantity supplied.

When Edward gets a new position making 25% more than his previous job, he decides to buy a Tesla Model S all electric vehicle instead of buying a Toyota Camry. In general, considering his purchase, the Tesla Model S would be considered a(n) (BLANK) good and the Toyota Camry would be considered a(n) (BLANK) good. This is an example of the effect of a change in (BLANK) on the (BLANK) for a good.

(BLANK) goods are goods that are produced using the same resources.

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Answer #1

A change in technology used in the production of a good or service causes a change in supply (since supply curve will shift).

An increase in price causes an increase in quantity supplied (since supply curve is upward rising, higher price will raise quantity supplied).

In general, considering his purchase, the Tesla Model S would be considered a normal good (since its demand increases as income rises) and the Toyota Camry would be considered an inferior good (sine its demand falls with increase in income). This is an example of the effect of a change in consumer income on the demand for a good.

Substitute goods are goods that are produced using the same resources.

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