Ch.+4+Review

Ch. 4 Review #1-7, 9-17

9. When goods rise in prices or people's incomes drop, they begin substituting more expensive items with ones that are cheaper, this is the substitution effect. Example would be name brand cereal being substituted with generic brand cereal. 10. The number of consumers, Price of substitutes and complements, Consumer income 11. To compare elasticity of products with a variety of prices and different quantities sold and various units of sale. 12. Availability of Substitutes, Relative Importance, Necessities vs. Luxuries, Change Over Time 13. I believe that there will always be inferior goods because there will always be someone who doesn't care how much the product is and will still buy it, I think the way to decrease the demand for inferior goods would be to raise the prices to outrageous amounts. 14. I disagree with the statement because the demand curve would shift to the right because everyone would have more money to purchase things which would make demand rise. 15.
 * 1) Demand Curve
 * 2) normal good
 * 3) income effect
 * 4) inelastic
 * 5) unitary elastic
 * 6) law demand
 * 7) complements