Do you agree or disagree with the following statements? Briefly explain your answers and illustrate each with supply and demand curves.
a. The price of a good rises, causing the demand for another good to fall. Therefore, the two goods are substitutes.
b. A shift in supply causes the price of a good to fall. The shift must have been an increase in supply.
c. During 2009, income fell sharply for many Americans. This change is likely to lead to a fall in prices of both normal and inferior goods.
d. Two normal goods cannot be a substitute for each other.
e. If demand increases and supply increases at the same time, prices will clearly rise.
f. The price of good A falls. This causes a rise in the price of good B. Therefore goods A and B are complements.