Refer to Figure 1-4. Which of the following statements is true?
A) The slope of the tangent at E and the slope of the tangent at F are negative.
B) The slope of the tangent at E is positive and the slope of the tangent at F is negative.
C) The slope of the tangent at E is negative and the slope of the tangent at F is positive.
D) The slope of the tangent at E and the slope of the tangent at F are positive.
Question 2
Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease.
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right. Which of the following correctly comments on this statement?
A) The statement is false because one cannot assume that chips and salsa are complements for all consumers.
B) The statement is false because a change in the price of chips would not change the demand for chips.
C) The statement will be true if consumer tastes for chips and salsa do not change.
D) The statement is false because salsa is an inferior good; chips are normal goods.
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