Question

7 matching 10 points
match the catalysts to the situations listed below.
fredo wins the lottery.
tennis rackets go on sale, making people also buy tennis balls.
the world cup is coming soon, which will help the economy of
the host country.
oil production is low, making gas stations have to charge more
money for fuel.
a new machine is invented to make cell phones charge in less
than ten minutes.
mother’s day is always the 2nd sunday in may, so flower
companies and restaurants need to get ready for more customers
on that day.
supplier expectations
income effect
future expections
cost of input
new technology
price change in related goods.

Explanation:

1. Fredo wins the lottery: When income increases (from winning lottery), it affects demand/consumption, so this matches Income Effect.
2. Tennis rackets go on sale, making people also buy tennis balls: Tennis rackets and balls are related goods (complements). A price change in one affects the other’s demand, so this matches Price change in related goods.
3. The World Cup is coming soon, which will help the economy of the host country: Businesses/consumers expect future economic activity, so this matches Future Expectations.
4. Oil production is low, making gas stations have to charge more money for fuel: Oil is an input for fuel. A change in input cost (low production means higher input cost) affects price, so this matches Cost of Input.
5. A new machine is invented to make cell phones charge in less than ten minutes: New technology improves production, so this matches New Technology.
6. Mother’s Day is always the 2nd Sunday in May, so flower companies and restaurants need to get ready for more customers on that day: Suppliers (flower companies, restaurants) expect increased demand on Mother’s Day, so this matches Supplier Expectations.

Answer:

• Fredo wins the lottery. → Income Effect
• Tennis rackets go on sale, making people also buy tennis balls. → Price change in related goods.
• The World Cup is coming soon, which will help the economy of the host country. → Future Expectations
• Oil production is low, making gas stations have to charge more money for fuel. → Cost of Input
• A new machine is invented to make cell phones charge in less than ten minutes. → New Technology
• Mother’s Day is always the 2nd Sunday in May, so flower companies and restaurants need to get ready for more customers on that day. → Supplier Expectations