The price of digital cameras fell because of improvements in ...

[skymedlock]

The price of digital cameras fell because of improvements in production technology. As a result, the demand for non-digital cameras decreased.
 
  This caused the price of non-digital cameras to fall; as the price of non-digital cameras fell the demand for non-digital cameras decreased even further. Evaluate this statement.
  A) The statement is false because digital camera producers would not reduce their prices as a result of improvements in technology; doing so would reduce their profits.
  B) The statement is false because the demand for non-digital cameras would increase as the price of digital cameras fell.
  C) The statement is false. A decrease in the price of digital cameras would decrease the demand for non-digital cameras, but a decrease in the price of non-digital cameras would not cause the demand for non-digital cameras to decrease.
  D) The statement is false because it confuses the law of demand with the law of supply.

Question 2

Refer to Figure 9-5. As a result of the tariff, domestic producers increase their quantity supplied by
 
  A) 6 million pounds of coffee. B) 18 million pounds of coffee.
  C) 26 million pounds or coffee. D) 38 million pounds of coffee.

[zoeyesther]

Answer to Question 1

C

Answer to Question 2

A

[skymedlock]

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[zoeyesther]

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