ECO205_Appendix+C - substitutes. 2. What do complements...

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EO 205 Appendix C – Instructor: Chiara Yates Event Market affected by event Shift in supply, demand, or both. Explain your answer. Change in equilibrium Frozen orange crops in California Orange Juice Supply (left)—Not as many available oranges to offer consumers. Price will increase and quantity will decrease. Price of hot dogs increases Hamburger New auto company opens in Detroit Automobile War in Middle East Gasoline Movie theaters increase admission prices Video rentals Very trendy designer handbag manufacturer enters the market Hand bags Cost of cotton decreases Textile Manufacturing Technology improves efficiency in pasta manufacturing Pasta 1. What do substitutes refer to in economics? Give an example of two
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Unformatted text preview: substitutes. 2. What do complements refer to in economics? Give an example of two complements. 3. Define Price Elasticity of Demand. Give an example. 4. Determine if the demand for the following products is price elastic or price inelastic, and explain your answer. In your explanation, be sure to include how the necessity of a good and the availability of substitutes affect the price elasticity of demand in each of these specific cases: Hotel rooms for people planning a vacation Hotel rooms for people on business to meet an important client...
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