If Shoes and Socks Are Complements and Both Are Normal

question 36

Essay

If shoes and socks are complements and both are normal goods, show graphically what would happen to the consumption of shoes and socks if
a.the price of shoes decreased.
b.consumer incomes increased.
B.
Figure 4-9a
b.Since both goods are normal, an increase in income leads to greater consumption of each good, as illustrated by the movement from C to D in Figure 4-9b.
Figure 4-9b

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Definitions:

Greenmail Option

A strategy where a company buys back its shares from a potential acquirer at a higher price to prevent a takeover.

Target Management

The practice of focusing organizational strategies and operations towards achieving predefined goals and objectives.

Sherman Antitrust Act

A landmark federal statute in the United States passed in 1890 that prohibits monopolistic business practices and promotes competition.

Per Se Violation

In antitrust law, a restraint of trade practice so serious that it is prohibited whether or not it actually harms anyone.