Questions

Do you agree or disagree with each of the following statements? Briefly explain your answers and illustrate each with supply and demand curves. a. The price of coffee rises, causing the demand for sugar to decrease. Therefore, the two goods are substitutes. b. A decrease in supply causes the price of coffee to fall. C. During 2009, incomes fell sharply due to the financial crisis of 2008-2009. This change likely led to a decrease in the prices of both normal and inferior goods. d. If both coffee and tea are normal goods and the price of coffee increases, it will increase the demand for tea. e. If the price of lemonade decreases due to insufficient demand, and its supply decreases at the same time, the equilibrium price will clearly rise