Substitutes
What will be an ideal response?
Two goods for which an increase in the price of one leads to an increase in the demand for the other.
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An assumption behind the infant-industry argument for tariff protection is that
A) foreign competitors are selling output below average cost. B) the domestic industry will be facing an upward adjustment in its average cost. C) the domestic industry will eventually gain a comparative advantage in producing the good. D) the market needs additional competition to satisfy consumer demand.
Refer to the table and graph. Suppose that the price of X falls from $2 to $1, while the price of Y remains at $4. Which of the following represents the demand curve for X if the consumer has money income of $10 to spend on X and Y?
A. D 1
B. D 2
C. D 3
D. D 4