1. Johns demand function of good 1 is Q1 = 20 + p2. p1 is the…

1. Johns demand function of good 1 is Q1 = 20 + p2. p1 is the
price of good 1, p1and p2 is the price of good 2. Which one of the
following statements is correct?
A. Good 2 is a substitute of good 1

B. Good 2 is a complement of good 1

C. Good 1 does not obey law of downward-sloping demand
D. The price of good 2 has no effect on the demand of good 1
2. Let I be the income of the consumer, px be the price of good
x (on the horizontal axis) and py be the price of good y (on the
vertical axis). Then the value of the horizontal axis can be
described by
A. I py
B. I px
C. py px
D. px py
3. Ann prefers good A to good B and good C to good D. If her
preference is transitive, and B and C are on the same indifference
curve. She must
A. prefer A to D

B. prefer D to A

C. indifferent between A and C
D. indifferent between B and D