7. How can the demand for one good be affected by increased demand for another one?
a) When goods are bought together, increased demand for one will decrease demand for the other.
b) If goods are used together, increased demand for one will increase demand for the other.
c) If goods are substitutes for each other, increased demand for one will increase demand for the other.
d) A drop in price for a good will increase demand for the good and its substitute.
8. How does the price range affect the elasticity of demand for a product?
a) Demand for all goods is elastic if the price is low enough.
b) Demand for a good can be elastic at a low price but inelastic at a high price.
c) Demand for a good can be inelastic at a low price, but elastic at a high price.
d) Price range has little or no effect on elasticity of demand for a good.
Answer (2)
I know 7 is If goods are used together, increased demand for one will increase demand for the other.
The demand for one good can be significantly affected by the demand for another good whether they are complements or substitutes. For question 7, the correct answer is b) If goods are used together, increased demand for one will increase demand for the other. For question 8, the answer is b) Demand for a good can be elastic at a low price but inelastic at a high price.
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