Homework Problem Set
ECON120 Homework Problem Set #1 – Spring 2019
For all multiple choice questions, circle the letter of the ONE best answer.
1. (8 points) If people demand more of product A when the price of product B falls, then A and B are:
A. normal goods.
B. substitute goods.
C. complementary goods.
D. inferior goods.
E. None of the answer choices A→D are correct
2. (8 points) When the economy suffers a downturn and the incomes of many people decrease, vacationers are more likely to take car trips than to fly. Which of the following provides one possible explanation for this phenomenon?
A. Air travel and vacation travel by car are complementary goods.