c.If the price of movie tickets increases,the demand for movie tickets will fall. The demand for coffee is unchanged assuming the goods are unrelated.The demand curve for coffee is unchanged. d.If the price of bus travel increases then the demand for bus tickets will fall and the demand for subway tickets will rise,assuming they are substitutes.The demand curve for subway tickets will shift to the right. 8.Which of the following events would cause a movement along the demand curve for U.S.-produced clothing.and which would cause a shift in the demand curve? a.the removal of quotas on the importation of foreign clothes The removal of quotas will shift the demand curve inward for domestically-produced cbthes because foreign-produced goods are substitutesfor domestically-produced goods Both the equilibrium price and quantity will fall as foreign clothes are traded in a free market environment. b.an increase in the income of U.S.citizens When income rises,expenditures on normal goods such as cbthing increase, causing the demand curve to shift out.The equilibrium quantity and price will increase c.a cut in the indust y's costs of producing domes stic clothes that is passed on to the market in the form of lower clothing prices A cut in an industry's costs will shift the supply curve out.The equilibrium price will fall and quantity will increase.There is a movement along the demand curve. 9.For which of the following goods is a price inerease likely to lead to a substantial income (as well as substitution)effect? a.salt Small incom effect:The amount of incme that isspen on relative ysmall,but since there are e few subs tes for salt. consumer will not readily substitute it. As the price of salt rises,real income wil fall only slightly,thus leading to a small decline in consumption b.housing Large income effect.no substitution effect:The amount of income spent on housing is relatively large for most consumers.If the price of housing were to rise, real income would be reduced substantially,thereby reducing the consumption of all other goods.However,oonsumers swould find it impossible to substitute for housing,in general c.theater tickets c. If the price of movie tickets increases, the demand for movie tickets will fall. The demand for coffee is unchanged assuming the goods are unrelated. The demand curve for coffee is unchanged. d. If the price of bus travel increases then the demand for bus tickets will fall and the demand for subway tickets will rise, assuming they are substitutes. The demand curve for subway tickets will shift to the right. 8. Which of the following events would cause a movement along the demand curve for U.S.-produced clothing, and which would cause a shift in the demand curve? a. the removal of quotas on the importation of foreign clothes The removal of quotas will shift the demand curve inward for domestically-produced clothes, because foreign-produced goods are substitutes for domestically-produced goods. Both the equilibrium price and quantity will fall as foreign clothes are traded in a free market environment. b. an increase in the income of U.S. citizens When income rises, expenditures on normal goods such as clothing increase, causing the demand curve to shift out. The equilibrium quantity and price will increase. c. a cut in the industry’s costs of producing domestic clothes that is passed on to the market in the form of lower clothing prices A cut in an industry’s costs will shift the supply curve out. The equilibrium price will fall and quantity will increase. There is a movement along the demand curve. 9. For which of the following goods is a price increase likely to lead to a substantial income (as well as substitution) effect? a. salt Small income effect, small substitution effect: The amount of income that is spent on salt is relatively small, but since there are few substitutes for salt, consumers will not readily substitute away from it. As the price of salt rises, real income will fall only slightly, thus leading to a small decline in consumption. b. housing Large income effect, no substitution effect: The amount of income spent on housing is relatively large for most consumers. If the price of housing were to rise, real income would be reduced substantially, thereby reducing the consumption of all other goods. However, consumers would find it impossible to substitute for housing, in general. c. theater tickets