Include curves

7 Normal and inferior goods

Price

Quantity

Supply

Demand

P*

Q*

Market for good X

Now incomes fall. What happens to the market for good X if

X is a normal good;

X is an inferior good?

Use graphs to answer these questions.

8 Substitutes and complements

Good A and good B are related to each other, either being substitutes or complements. Now the price of good B rises. Illustrate the impact on the market for good A

(with graphs) if

A and B are substitutes;

A and B are complements.

9 Minimum price

Price

Quantity

Supply

Demand

P*

Q*

Market for milk

The government imposes a minimum price. Illustrate the impact on the market for milk.

10 Maximum price

Price

Quantity

Supply

Demand

P*

Q*

Market for housing

The government imposes a maximum price. Illustrate the impact on the market for

housing.