Q1
Product
complements
Gasoline and electric car batteries

Houses and household appliances

substitutes
unrelated

UGC and Kindle e-readers

iPad and Kindle e-readers
Q2
Price
Demand for watermelons is higher in summer making demand higher. Holding a fixed supply,
this would make watermelons prices higher than in the winter. Though, the supply of
watermelons will also rise in the summer, probably over demand. This makes the watermelon
balance price less in the summer.
Winter
Summer
Supply
Demand
Quantity
Q3
A. True, if both supply and demand shift to the right, quantity will increase, but the price
cannot be determined.
B. False, the new equilibrium price cannot be determined. It can increase, decrease or
stay put.
C. False, the demand shifts to the left, and supply shifts to the right, quantity will not be
able to determined, but price will decrease.
Q4
D
Price
S
Quantity
The graph that shows a vertical demand curve is possibly one of the drugs that resist cancer
because, as the price of the drug rises, patients will still be demanding the drug. On the other
hand, if the price of BMW increases, people will reduce the amount of demand for this BMW
cars.