1. Explain each of the following. Be sure to refer to the Ed formula, the Demand curve and the TR curve in each answer.

a. why is it that when Price declines, that TR can do three different things - rise, fall and stay the same. 35 pts

b.why is it that when Price rises, that TR can do three different things - rise, fall and stay the same. 35pts

2. Using only the formulas for income elasticity and cross price elasticity. 15 pts

a. explain the difference between normal goods and inferior goods.

b. expain the diffence between substitute goods and complementary goods. 15 pts