Substitutes are pairs of goods that have a positive cross-price elasticity of demand

John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?

A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. D) John's decision does not involve his pursuit of self-interest.

Assume in a competitive market that price is initially above the equilibrium level. We can predict that price will:

A. decrease, quantity demanded will decrease, and quantity supplied will increase. B. decrease and quantity demanded and quantity supplied will both decrease. C. decrease, quantity demanded will increase, and quantity supplied will decrease. D. increase, quantity demanded will decrease, and quantity supplied will increase.