Two goods are substitutes when A) an increase in the price of ...

[Beheh]

Two goods are substitutes when
 
  A) an increase in the price of one reduces the demand for the other.
  B) an increase in the price of one raises the demand for the other.
  C) the two goods are used together.
  D) the two goods have the same price.

Question 2

In graphical form, the presence of an external benefit that is ignored by consumers can be shown as
 
  A) a market demand curve to the left of the market demand curve for which the consumers take the external benefit into account.
  B) a market demand curve to the right of the market demand curve for which the consumers take the external benefit into account.
  C) a market demand curve the same as the market demand curve for which the consumers take the external benefit into account.
  D) the absence of a market demand curve.

[flexer1n1]

Answer to Question 1

B

Answer to Question 2

A