Demand for a good will always increase when
a. the price of a complementary good falls
b. the price of a substitute good falls
c. tastes change
d. incomes decrease
e. the price of the good falls
A
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The statement "If Harvey goes to Subway then Candice should go to Subway, and if Harvey goes to Taco Bell, then Candice should go to Taco Bell" is an example of locating equilibria by using the technique known as
A) mutual interdependence. B) cooperative coordination. C) cell-by-cell inspection. D) best-response analysis.
Refer to Figure 10-2. When the price of ice cream cones increases from $2 to $3, quantity demanded decreases from 4 ice cream cones to 3 ice cream cones. This change in quantity demanded is due to
A) the fact that marginal willingness to pay falls. B) the price and output effects. C) the law of diminishing marginal utility. D) the income and substitution effects.