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Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
Edition 20ISBN: 978-0077660819Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
Edition 20ISBN: 978-0077660819 Exercise 1
Indicate whether each of the following relationships is usually a direct relationship or an inverse relationship.
a. A sports team's winning percentage and attendance at its home games.
b. Higher temperatures and sweater sales.
c. A person's income and how often he or she shops at discount stores.
d. Higher gasoline prices and miles driven in automobiles.
a. A sports team's winning percentage and attendance at its home games.
b. Higher temperatures and sweater sales.
c. A person's income and how often he or she shops at discount stores.
d. Higher gasoline prices and miles driven in automobiles.
Explanation
Verified
Verified
a.
Winning percentage and attendance:
Since the winning teams are usually more popular, the team has higher winning percentage. Thus, more people would like to watch the match when the particular team is playing and vice versa.
Hence, the winning percentage and attendance has direct relationship.
b.
Temperature and sales of sweater:
In the cold season (lower temperature) people are use sweater to protect them from the cold. Thus, more people prefer to buy sweater in the cold season that would result in higher sales of sweater. On the other hand, in the summer season (Higher temperature) people prefers cotton kind of dresses that would allow the air circulation. So, the sales of sweater would reduce.
Hence, the level of temperature and sales of sweater has inverse relationship.
c.
Income level and shopping at discount store:
A consumer with low income level purchases less. They prefer to buy at discount shop in order to reduce the expense that would help the person to meet all his expense and savings.
If the income of the consumers increases, then his purchasing power increases. Since the consumer has higher purchasing power, they tend to shop at expensive shop.
Hence, income level and shopping at discount shop has inverse relationship.
d. Gasoline price and driven miles:
A lower gasoline price will cost less to travel for higher miles in automobiles. If the gasoline price increases, it leads to increase in the cost of traveling by automobiles. This in turn reduces the driven miles in auto mobiles in order to reduce the cost of traveling.
Hence, the gasoline price and driven miles has inverse relationship.
Winning percentage and attendance:
Since the winning teams are usually more popular, the team has higher winning percentage. Thus, more people would like to watch the match when the particular team is playing and vice versa.
Hence, the winning percentage and attendance has direct relationship.
b.
Temperature and sales of sweater:
In the cold season (lower temperature) people are use sweater to protect them from the cold. Thus, more people prefer to buy sweater in the cold season that would result in higher sales of sweater. On the other hand, in the summer season (Higher temperature) people prefers cotton kind of dresses that would allow the air circulation. So, the sales of sweater would reduce.
Hence, the level of temperature and sales of sweater has inverse relationship.
c.
Income level and shopping at discount store:
A consumer with low income level purchases less. They prefer to buy at discount shop in order to reduce the expense that would help the person to meet all his expense and savings.
If the income of the consumers increases, then his purchasing power increases. Since the consumer has higher purchasing power, they tend to shop at expensive shop.
Hence, income level and shopping at discount shop has inverse relationship.
d. Gasoline price and driven miles:
A lower gasoline price will cost less to travel for higher miles in automobiles. If the gasoline price increases, it leads to increase in the cost of traveling by automobiles. This in turn reduces the driven miles in auto mobiles in order to reduce the cost of traveling.
Hence, the gasoline price and driven miles has inverse relationship.
Microeconomics 20th Edition by Campbell McConnell, Stanley Brue,Sean Flynn
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