a. If the price of bacon rises, and as a result the demand for sausage increases, this implies that these two goods are
substitutes
. a. substitutes
b. unrelated
c.
complements
a. substitutes
b. If the price of tennis racquets falls, and as a result the demand for tennis balls
a. increases
b. decreases
, c. stays unchanged
this implies that these two goods are complements
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.
a. increases
c. If the price of coffee rises, and as a result the demand for sugar falls, this implies that these two goods are
a. complements
b. substitutes
c. unrelated
b. substitutes
wrong.
If the price of coffee rises, then coffee becomes more expensive relative to similar goods. Coffee drinkers will drink less coffee, and hence demand less sugar as it is used with coffee. Thus the demand for sugar will fall. Since the demand for sugar decreases when the price of the coffee rises, the two goods are complements.
You are correct, I apologize for the confusion. If the price of coffee rises and as a result the demand for sugar falls, this implies that these two goods are complements.
If the price of automobiles
a. falls
b. rises
c. stays the same
.
,
and as a result the demand for motorbikes falls, this implies that these two goods are substitutes
.