Sia
Question
Microeconomics
Posted 6 months ago
Meeps and Blops are two goods that are related to each other. When the price of Meeps goes down, the demand for Blops goes down.
Based only on the information given here, what kind of goods are Meeps and Blops?
Choose 1 answer:
A substitutes
(B) normal goods
(c) inferior goods
(D) complements
(E) superior goods
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Answer from Sia
Posted 6 months ago
Solution
a
Definition of Complements: Complementary goods are products that are typically consumed together. When the price of one good decreases, the demand for the other good usually increases
b
Analysis of Given Information: In this case, when the price of Meeps goes down, the demand for Blops also goes down. This indicates that Meeps and Blops are not consumed together
c
Conclusion: Since the demand for Blops decreases when the price of Meeps decreases, Meeps and Blops are not complements. Instead, they are substitutes
Answer
A substitutes
Key Concept
Substitutes are goods that can replace each other in consumption. When the price of one decreases, the demand for the other decreases.
Explanation
The decrease in the price of Meeps leading to a decrease in the demand for Blops suggests that consumers are switching from Blops to Meeps, indicating that these goods are substitutes.
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