C O N C E P T P R O B L E M S
1. What do you think happens to the demand for pizzas during the Super Bowl? Why?
2. Which of the following goods are likely to be classified as normal goods or services? Inferior? Defend your
answer.
a. Beans
b. Tuxedos
c. Used cars
d. Used clothing
e. Computers
f. Books reviewed in The New York Times
g. Macaroni and cheese
h. Calculators
i. Cigarettes
j. Caviar
k. Legal services
3. Which of the following pairs of goods are likely to be classified as substitutes? Complements? Defend your
answer.
a. Peanut butter and jelly
b. Eggs and ham
c. Nike brand and Reebok brand sneakers
d. IBM and Apple Macintosh brand computers
e. Dress shirts and ties
f. Airline tickets and hotels
g. Gasoline and tires
h. Beer and wine
i. Faxes and first-class mail
j. Cereal and milk
k. Cereal and eggs
4. A study found that lower airfares led some people to substitute flying for driving to their vacation
destinations. This reduced the demand for car travel and led to reduced traffic fatalities, since air travel is
safer per passenger mile than car travel. Using the logic suggested by that study, suggest how each of the
following events would affect the number of highway fatalities in any one year.
a. An increase in the price of gasoline
b. A large reduction in rental rates for passenger vans
c. An increase in airfares
5. Children under age 2 are now allowed to fly free on U.S. airlines; they usually sit in their parents’ laps. Some
safety advocates have urged that they be required to be strapped in infant seats, which would mean their
parents would have to purchase tickets for them. Some economists have argued that such a measure
would actually increase infant fatalities. Can you say why?
6. The graphs below show four possible shifts in demand or in supply that could occur in particular markets.
Relate each of the events described below to one of them
