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practice problems_2 - if the price of Pepsi increased the...

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195.603 Microeconomics More Practice with Supply and Demand Professor Carey Borkoski, Ph.D. Directions -For each of the following draw initial supply and demand curves and identify equilibrium. Use the graph to demonstrate the effect of the events in each problem. 1. Assume pictures and picture frames are complements. What will happen in the market for picture frames if the price of pictures decreased? 2. Assume bananas are a normal good and bananas and pineapples are substitutes in production. What will happen in the market for bananas if the income of people who buy bananas decreased and the price of pineapples increased? 3. Assume Coke and Pepsi are substitutes. Assume a new technology is introduced in the production of Coke. Assume Coke is an inferior good. What will happen in the market for Coke
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Unformatted text preview: if the price of Pepsi increased, the new technology is introduced, and the income of people who buy Coke increased? 4. Assume books are a normal good. Assume paper is used to make books. What will happen in the book market if the income of people who buy books decreased, the price of paper increased. 5. Assume paint and paint brushes are complements and dye is used to make paint. What will happen in the market for paint if the price of paint brushes increased and the price of dye decreased? 6. Assume strawberries are used in the production of strawberry jam. What will happen in the market for strawberry jam if the price of strawberries increases and a new study is released indicating that strawberry jam lowers blood pressure?...
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