Answer to Question #11774 in Microeconomics for Andrew Rumsey

Question

___7) Suppose you are considering purchasing a vehicle and the price of a Toyota Camry is $20,000 and the cost of a new Honda motorcycle is $10,000. Meaning that for every Toyota Camry you purchase you are giving up two Honda motorcycles. Using only the information given, which of the following statements is true?
a) The relationship between motorcycles and Camry’s is positive.
b) The equation that maps this relationship is y = 1 + 2x, where y is motorcycles and x is Camry’s.
c) The relationship between Honda motorcycles and Camry’s is negative.
d) The equation that maps this relationship is y = 1 - 2x, where y is motorcycles and x is Camry’s.

Answer 1

c) The relationship between Honda motorcycles and Camry’s is negative.