Micro

• What are complements in economics?

  Goods that are usually bought together
• What is another name for complementary goods?

  Goods in joint demand
• Give an example of complementary goods.

  Printers and printer ink
• How does an increase in the price of printers affect printer ink demand?

  It shifts the demand for printer ink left
• If the price of printers rises from $p_1$ to $p_2$, what happens to printer ink demand?


  Demand for printer ink decreases
• What happens to the demand for razors if their price decreases?


  Demand for razors extends
• How does a decrease in razor prices affect razor blade demand?

  Demand for razor blades increases
• What are substitute goods?

  Goods that are in competitive demand
• How do changes in the price of Coke affect Pepsi demand?

  Higher Coke prices increase Pepsi demand
• If the price of Coke decreases, what happens to the demand for Pepsi?

  Demand for Pepsi decreases
• What is derived demand?

  Demand for a good derived from another good
• Give an example of derived demand.

  Aluminium demand from car production
• How does an increase in car demand affect aluminium demand?

  Aluminium demand increases
• What is composite demand?

  Demand for goods that share the same input
• How does an increase in cheese production affect butter supply?

  Butter supply decreases
• What happens when the production of one good increases in composite demand?

  Supply of the other good decreases
• What is joint supply?

  Increase in one good's production increases another's
• Give an example of joint supply.

  Honey and beeswax
• How does an increase in honey production affect beeswax supply?

  Beeswax supply increases
• What happens to petroleum supply when crude oil production increases?

  Petroleum supply increases
• What are the key concepts of market interrelationships?

  • Complements: Goods bought together
  • Substitutes: Goods in competition
  • Derived Demand: Demand from another good
  • Composite Demand: Shared input goods
  • Joint Supply: Byproducts of production
• How do price changes affect demand in complementary and substitute goods?

  • Complementary Goods: Price increase in one decreases demand for the other
  • Substitute Goods: Price increase in one increases demand for the other
• What is the impact of derived demand on labor and inputs?

  • Increased demand for goods raises input demand
  • Labor demand increases with economic growth
• What is the relationship between composite demand and production inputs?

  • Increased production of one good reduces supply of another
  • Goods share the same production inputs
• What is the significance of joint supply in production?

  • Increase in production of one good increases supply of byproducts
  • Example: Honey production increases beeswax supply