State in words and show with a graph the effect of the following events on equilibrium price and quantity of the market given.
a. Netflix increases it’s price by 15%. Market: Redbox DVDs.
b. The price of cheese increases by 20% Market: Pizza.
c. Income in the US increase by 10%. Market: Easy Mac (an inferior good)
4. Match the following words with their definitions:
a. Luxury ____1. Cross price elasticity of demand is negative.
b. Complement ____2. Income elasticity of demand is negative.
c. Necessity ____3. Income elasticity greater than one.
d. Substitute ____4. Income elasticity less than one.
e. Inferior good ____5. Income elasticity of demand is positive.
f. Normal good ____6. Cross-price elasticity of demand is positive.