Chapter 3 - Chapter 3 Answers to Problems 1. Complements...

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Chapter 3 Answers to Problems 1. Complements and substitutes: a. Substitutes b. Complements c. Probably substitutes for most people, but complements for some others who like to eat ice cream and chocolate together. d. Substitutes 3. The demand curve would: e. Shift to the right. Buyers’ income has risen and vacations are a normal good, so this increase the quantity demanded at every given price. f. Shift to the right. Buyers’ preferences will probably change because most people want to avoid foods that cause heart disease. Thus, buyers will purchase fewer hamburgers and more pizza. g. Shift to the right. When the price of a substitute rises, the demand for a good increases i.e. shifts to the right. h. Not be affected. An increase in the price of CDs decreases the quantity demanded of CDs i.e. causes a movement along the demand curve. 5. ince labor is an input to orange production, an increase in the wage is an increase in the cost of an input. This will shift the supply curve of oranges to the left, resulting
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Chapter 3 - Chapter 3 Answers to Problems 1. Complements...

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