Question

Question 1:

A recent study found that an increase in the Federal tax on beer (and thus an increase in the price of beer) would reduce the demand for marijuana. We can conclude that:

A-	beer and marijuana are substitute goods.

B-	beer and marijuana are complementary goods.

C-	beer is an inferior good.

D-	marijuana is an inferior good.

Question 2:

Assume the demand curve for product X shifts to the right. This might be caused by:

A-	a decline in income if X is an inferior good.

B- a decline in the price of Z if X and Z are substitute goods.

C-	a change in consumer tastes that is unfavorable to X.

D- an increase in the price of Y if X and Y are complementary goods.