Refer to Figures A, B, C, and D.  Select the figure that best illustrates the likely effect of the following events. The dotted line shows the shift caused by the event.

Event A: Computer chips, used to make personal computers, go down in price. Which figure illustrates the effect on the market for personal computers?

Event B: Consumers’ income falls during a recession. Which figure illustrates the effect on the market for vacation travel (which is a normal good)?

Event C: The price of margarine rises. Which figure illustrates the effect on the butter market (a substitute for margarine)?

Event D: Building firms can build office buildings or school buildings. The price of office buildings falls (due to a national recession), while the demand for school buildings is unaffected. Which figure illustrates the effect on the market for school buildings?

Event E: The price of compact discs goes down. Which figure illustrates the effect on the market for compact disc players (a complement to compact discs)?

Transcribed Image Text:

Figure A Figure C D S D' S Q P Figure B Figure D S D Q