Car insurance and cars are complements. If the price of car insurance increases, the quantity of cars demanded decreases. demand for cars increases. More information is needed to determine if the demand increases or decreases. demand for cars decreases. Which of the following shifts the supply curve for oranges? an increase in income for all orange consumers if oranges are a normal good an increase in the price of bananas, a substitute in consumption for oranges a newly discovered increase in the nutritional value of oranges disastrous weather that destroys about half of this year’s orange crop
AnswerQ1. ANSWER : demand for cars decreases Complement goods are those type of goods which complete each other i.e which are consumed together. For example vread and butter. Given in the question that car insurance and cars are complements. So, if the price of car insurance increases the quantity demanded for car insurance will decrease and as a result the demand for its complement good i.e car will also decrease. Q2. ANSWER : disastrous weather that destroys about half of this year’s orange crop
A supply curve shows the positive relationship between the price of a good and its quantity supplied. There are several factors which shift the supply curve. Natural disaster is one such factor. A disastrous weather destroys the crop for orange, as a result there is not enough ornages to supply in the market and the supply curve for oranges shifts leftwards.