hw 1 dsm 1, hw 2, hw 3, dsm 4

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The opportunity cost of any action is

the highest−valued alternative given up.

If Y = 800 - 4X, what is the slope of this line?

-4

Question Help ​______ is an example of U.S. consumption expenditure

. Your purchase of a coffee from Starbucks

The table below shows the maximum output of wine and cloth that England and Portugal can produce under constant cost conditions. WINE CLOTH ENGLAND 150 140 PORTUGAL 110 70 What is the lowest possible price England will sell cloth​ for? What is the highest possible price Portugal will pay for​ cloth?

1.07; 1.57

​______ earns​ ______.

A coal deposit​; rent

Which of the following goods and services would be excluded from personal consumption expenditures in the Bureau of Economic Analysis (BEA) statistics?

A new house

Two​ countries, Alpha and​ Beta, have identical production possibilities frontiers. If Alpha produces at point A and Beta produces at point B​, then​ _______. #20

Alpha consumes morethan Beta​ today, but it will grow slower than Beta

​______ good is an item that is bought by its final user during a specified time period. ​______ good is an item that is produced by one​ firm, bought by another​ firm, and used as a component of a final good or service.

A​ final; An intermediate

How does the Bureau of Economic Analysis of the U.S. Department of Commerce measure GDP?

By adding the value in dollar terms of all the final goods and services produced domestically.

In what type of economy does the government decide how most economic resources will be allocated?

Centrally planned economy

According to the economic way of thinking, people:

Compare costs and benefits and make a choice to achieve the greatest benefit over the cost for the person making the choice.

Which of the following is TRUE regarding real​ GDP? I. Real GDP is the value of the total production of the​ country's farms,​ factories, shops, and offices. II. Real GDP rises whenever inflation occurs. III. Real GDP does not measure all that is produced.

I and III

Economic decisions are made at every level in society. When we try to decide which production method to use among several alternatives, which of the following key economic questions are we trying to answer?

How do we produce the products?

Which of the following are not counted as final goods and used in the GDP calculation?

Intermediate goods

Which of these is not a shortcoming of GDP as a measure of standard of living?

It only counts final goods and services and not intermediate goods.

Who is Chairman of the Board of Governors of the Federal​ Reserve?

Janet Yellen

Martha can produce 6060 quilts or 180180 batches of chocolate chip cookies in a month. Jane can produce 99 quilts or 1818 batches of chocolate chip cookies in a month. Martha has an absolute advantage in both goods. ​______ has a comparative advantage in quilts. ​______ has a comparative advantage in chocolate chip cookies.

Jane​; Martha

__________ is the study of how households and businesses make choices, how they interact in markets, and how government influences their choices.

Microeconomics

Anything accepted as a means of payment Makes trading efficient Facilitate trade Enable​ buyers/sellers to get info and do business with each other Hire factors of production Organize factors of production to produce and sell goods and services Govern ownership​ & use of things people value Provide incentive to​ specialize/produce

Money Markets Firms Property rights

Which of the following countries has an economy where most of the resource allocation is determined by a central planning authority?

North Korea

Choose the option that is an example of government expenditure.

Secret service protection for the President

Which of these is a macroeconomic study?

The study of how fast prices in general are rising.

Macroeconomics focuses on which of the following topics?

Unemployment, inflation, growth, and trade

The waste basket you bought when you moved into residenceThe waste basket you bought when you moved into residence is an example of​ ______ good. Biscotti bought by Delta Airlines and served to passengersBiscotti bought by Delta Airlines and served to passengers is an example of​ ______ good.

a finala final​; an intermediatean intermediate

Nominal GDP is​ ______. Real GDP is​ ______.

a more precise name for GDPa more precise name for GDP​; the value of final goods and services produced in a given year when valued at the prices of a reference base year

All of the following are examples of investment except​ ______.

a student increasing his human capital by attending collegea student increasing his human capital by attending college

n the​ graph, real GDP is the blue curve and potential GDP is the black curve. In 2017 comma Upper Q 42017, Q4​, U.S. real GDP increased by ​$108108 billion from the previous quarter. ​>>> Answer with a positive number. In 2017 comma Upper Q 42017, Q4​, the U.S. economy was in​ ______ because real GDP​ ______.

an expansionan expansion​; did not decreasedid not decrease for two successive quarters

The use of purchasing power parity prices

accounts for differences in the prices of the same goods in different countries when measuring real GDP.

Potential GDP is

achieved when all factors of production are fully employed.

If​ Nike, an American​ corporation, produces sneakers in Thailand this would

add to​ Thailand's GDP but not to U.S. GDP.

An U.S. firm buys a new industrial sewing machine from a company located in France. Which of the following is​ true? I. U.S. net exports decrease. II. U.S. investment increases.

both I and II

The price of food increased during the past year. The law of demand applies to food because when the price of food​ rises, there is​ ______.

both a substitution effect and an income effect

Suppose that the United States and Cuba decide to open up trade. If each country specializes in the good in which it has a comparative​ advantage, ______ will gain from that trade because ​ ______.

both​ countries; consumption possibilities in both Cuba and the United States will lie outside their PPFs

The cycle of short-term ups and downs in the economy is called:

business cycle

Graphs are often used in economics because they:

can simplify complex topics

What kind of economic system relies on private ownership of​ resources, direct incentives and decisions made via markets and the price​ mechanism?

capitalism

​If, as the price of a gym membershipa gym membership increasesincreases​, the quantity of bottled waterbottled water that people buy decreasesdecreases​, then gym membershipsgym memberships and bottled waterbottled water are​ _______.

complements

The expenditure approach to measuring GDP sums together​ ______, and the largest component is​ ______.

consumption​ expenditure, investment, government expenditure on goods and​ services, and net​ exports; consumption expenditure

Which of the following is not a possible opportunity cost of attending college?

cost of housing

Real GDP​ ______.

does not include a measure of leisure time or environmental qualitydoes not include a measure of leisure time or environmental quality

As the value of a country's real GDP increases, the country is likely to:

devote more resources to pollution reduction

Harry enjoys tennis but wants a high grade in his economics course. Figure 1 shows the limits to what he can achieve. Figure 2 shows​ Harry's marginal benefit curve from tennis. Now Harry becomes a tennis superstar with big earnings from the sport. Harry's PPF​ ______and his MB curve​ ______. ​Harry's efficient time allocation________.

does not​ change; shifts rightward increases

What are the four goals of any economic​ system? (Order does not matter but spelling​ does! Separate them with a​ comma.)

efficiency, equity, stability, growth

Understanding economics can help policymakers devise strategies to do all of the following except:

eliminate climate change

A typical business cycle can be described by the sequence​ ______.

expansion, peak,​ recession, trough

I calculated real GDP by summing the components of aggregate​ _____, so I used the​ _____ approach.

expenditure; expenditure

The factor market can best be described as where

firms buy the services of​ labor, land and capital.

Which of the following is a final​ good?

flour purchased at the store to bake cookies

If we compare the four sources of spending in the economy we see that

household consumption is the largest.

Macroeconomics can be used to understand all of the topics listed below, except:

how a consumer decides between the purchase of two different cars

Scarcity​ - be it in​ time, talent, or money​ - forces all of us to make choices. But according to​ economists, those choices can be influenced. What do choices respond​ to?

incentives

Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity​ produced? The PPF bows outward because as we move from point A to point B to point C​, the opportunity cost of producing a blanketblanket ​______.

increases. Resources are not equally productive in all activities

A movie star is an example of the factor of production​ _______.

labor

The GDP is a measure of the __________.

market value of the final goods and services produced within a country in a given time period

The figure shows the circular flows in the market economy. When Apple Inc. hires a student intern during the summer hires a student intern during the summer​, the flows are a​ ______ from firms to households and a​ ______ from households to firms.

money​ flow; real flow

When you buy a new e dash book from Amazon you buy a new e-book from Amazon​, the flows are a​ ______ from households to firms and a​ ______ from firms to households.

money​ flow; real flow

Your checking accountYour checking account is an example of​ ______ good. Sugar purchased by Angelo's bakery to make pies and cakesSugar purchased by Angelo's bakery to make pies and cakes is an example of​ ______ good.

neither a final nor an intermediate

If the president announced that "we should do something to stimulate economic growth" this is an example of a __________.

normative statement

In​ 2011, Ozzie purchased a 2008 Ford Escort from his neighbor for his​ son, purchased a 2007​ "one owner" Camry from Larchmont Toyota for his​ wife, bought a 2011 new Ford for​ himself, and sold his 2000 Dodge Caravan to his teenage nephew.​ Which, if​ any, of these transactions will be included in GDP in​ 2011?

only the purchase of the Ford

Mario's, a pizza and pasta​ producer, experiences increasing opportunity cost. Draw a production possibilities frontier for​ Mario's that illustrates this fact. Label it PPF. Draw a point that is attainable. Label it Attainable. Draw a point that is not attainable. Label it Unattainable.

outside the PPF

The stock of computers, factory buildings and machine tools used to produce goods is known as:

physical capital

In the United​ States, GDP is typically measured

quarterly

The GDP per capita is computed by dividing a country's:

real GDP by its population

The relationship between real GDP and potential GDP is that

real GDP fluctuates about potential GDP.

Economics is the study of choice under conditions of:

scarcity

The principle of opportunity cost evolves from the concept of:

scarcity

The role of the entrepreneur always involves:

taking risks

GDP Expands 11.4​ percent, Fastest in 13 Years ​China's gross domestic product grew 11.4 percent last year and marked a fifth year of​ double-digit growth. The increase was especially remarkable given that the United States is experiencing a slowdown due to the​ sub-prime crisis and housing slump. Citigroup estimates that each 1 percent drop in the U.S. economy will shave 1.3 percent off​ China's growth, because Americans are heavy users of Chinese products. In spite of the​ uncertainties, China is expected to post its sixth year of​ double-digit growth next year. Read the news​ clip, then answer the following questions. According to the expenditure approach for calculating​ China's GDP,​ "each one percent drop in the U.S. economy will shave 1.3 percent off​ China's growth" because as the U.S. economy​ shrinks, ______. ​China's ______ and​ China's real GDP decreases.

the United States imports less from​ China; exports decrease

The point where economic activity bottoms out in a full business cycle is known as:

the trough

The slope of a straight line equals the change in the value on the __________ axis __________ by the change in the value of the other axis measured between any two points on the line.

vertical, divided

All economic questions arise because we

want more than we can get.

Kim can produce 40 pies or 400 cakes an hour. Liam can produce 100 pies or 200 cakes an hour. Draw​ Kim's PPF. Label it. Draw​ Liam's PPF. Label it. Draw a point to show​ Kim's production of pies and cakes when she spends 30 minutes of each hour producing pies and 30 minutes producing cakes. Label it 1. Draw a point to show​ Liam's production of pies and cakes when he spends 30 minutes of each hour producing pies and 30 minutes producing cakes. Label it 2. Draw a point to show​ Kim's production if she specializes and produces one good. Label it 3. Draw a point to show​ Liam's production if he specializes and produces one good. Label it 4. When Kim and Liam move from spending 30 minutes of each hour producing pies and 30 minutes producing cakes to specializing in the good in which they have a comparative​ advantage, the total gains from trade are​ ______ pies and​ ______ cakes. If they share the total gains​ equally, Kim gives Liam​ ______ and Liam gives Kim​ ______.

​30; 100 50​ cakes; 15 pies

Suppose that there is a substantial fall in the price of apples. Apples are​ (obviously) the major ingredient in apple juice. As a result of this​ event, the market for apple juice changes in this​ way: ​ ________________.

​falls; rises

Upper A dairy produces butter and ice cream.A dairy produces butter and ice cream. The marginal cost of producing each of these products increases as more is produced. Draw the​ firm's PPF. Label it PPF1. The dairydairy adopts a new technology that allows it to use fewer resources to make buttermake butter. Draw a PPF that shows the impact of the new technology. Label it PPF2. With this new​ technology, the opportunity cost of producing a ton of ice creamton of ice cream ​______ and the dairydairy is​ ______ efficient.

​increases; equally

In an​ hour, SimonSimon can catch 44 pounds of bass or pick 88 pounds of peaches. In an​ hour, JohnJohn can catch 44 pounds of bassbass or pick 2020 pounds of peachespeaches. The opportunity cost of catching a pound of bass is​ ______ for SimonSimon than for JohnJohn​, and the opportunity cost of picking a pound of peaches is​ ______ for Simon than for John. So​ ______ has a comparative advantage in producing​ ______.

​lower; higher Simon​; bass

Coal and oil are​ ______. A skateboard and an iPod are​ ______.

​substitutes; complements

You plan to travel in Europe this summer. If you​ do, you​ won't be able to take your usual summer job that pays $8,000 for the​ summer, and you​ won't be able to live at home for free. The cost of transportation is ​$3,000​, visas cost ​$300, and living expenses are ​$1,700. What is the opportunity cost of your plan to travel in​ Europe?

$1300

You plan to go to school this summer. If you​ do, you​ won't be able to take your usual summer job that pays ​$12,000 for the summer. The cost of tuition is ​$3,000 and textbooks cost ​$100 You live with your​ family, which covers your living expenses of ​$1,700. What is your opportunity cost of going to school this​ summer?

$15,100

Your employer has asked you to start working overtime and has offered to pay​ $18 per hour for every hour you work beyond forty hours a week. The wage rate for each of the first forty hours will continue to be the usual​ $15 per hour. In terms of​ dollars, what is the marginal benefit of working each hour of​ overtime?

$18.00

Marilyn​, a computer science student, buys three cups of coffee a​ day, which costs her ​$9.00 She decides to buy one more cup each day and her expenditure on coffee increases to ​$12.00 The marginal cost to Marilyn of a cup of coffee is​ _______.

$3.00

The night before a midterm​ exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night​ before, you'd have scored 70 percent. What was the opportunity cost of your evening at the​ movies?

10 percent off your grade.

The graph shows the marginal cost of producing blue jeansblue jeans and the marginal benefit from blue jeansblue jeans in Oakdale. Oakdale achieves allocative efficiency if​ _______. Hw 2, # 19 SLB look at graph

44 pairs of blue jeanspairs of blue jeans an hour are produced

The U.S. GDP per capita in 2013 was approximately __________.

50,000

Which of the following is a positive economic statement?

If minimum wage rates rise, then unemployment will rise.

Which of the following best defines capital as a factor of​ production?

Instruments, machines, and buildings used in production.

Kelly is an​ architect, and she is trying to decide whether to hire​ Mike, a​ draftsman, to assist with her work. Kelly could hire Mike at​ $20 per​ hour, but it would take him three times as long to complete a task as it takes Kelly. Kelly is able to earn​ $90 per hour and has more architectural jobs than she is able to handle. Which of the following is​ true?

Mike should be hired at the​ $20 per hour wage rate.

Which measure of GDP represents changes in the quantity of goods and services produced in the economy, holding prices constant?

Real GDP

Choose the correct statements. 1. To describe preferences comma economists use the concept of marginal cost. 2. The marginal benefit from a good or service is the benefit received from consuming one more unit of it. 3. We measure the marginal benefit from a good or service by the most that people are willing to pay for an additional unit of it. 4. We measure the marginal benefit from a good or service by the least that people are willing to pay for all the units they consume.

Statements 2 and 32 and 3 are correct.

Choose the correct statements. a. There is no relationship between the opportunity cost of producing an additional good measured on the x dash axis andThere is no relationship between the opportunity cost of producing an additional good measured on the x-axis and the opportunity cost of producing an additional good measured on the y dash axis.the opportunity cost of producing an additional good measured on the y-axis. nothing b. Opportunity cost of a good is the decrease in the quantity produced of one good divided by the increase in the quantityOpportunity cost of a good is the decrease in the quantity produced of one good divided by the increase in the quantity produced of another good as we move along the PPF .produced of another good as we move along the PPF. nothing c. The opportunity cost of an action is the highest dash valued alternative forgone.The opportunity cost of an action is the highest-valued alternative forgone. nothing nothing d. Opportunity cost of a good cannot be accurately measured along a PPF because the PPF shows only two goods.Opportunity cost of a good cannot be accurately measured along a PPF because the PPF shows only two goods. nothing

Statements b and cb and c are correct.

When most economists wake up in the​ morning, their first decision is whether or not to hit the snooze alarm. What statement best represents their thought process as a rational decision​ maker? ​ (How does an economist approach analyzing a situation like​ this?)

The marginal benefit of sleeping 10 more minutes is greater than the marginal benefit of 10 more minutes of work.

Every​ week, HassanHassan skates for one hour​, and his grade on each econ test is 90 percent. Last​ week after skating for one hour​, hassan considered skating for another hour. He decided to skate for another hour and cut his study time by one hour. But last​ week, his econ grade fell to 70 percent. Given that Hassan spent a second hour skating​, what can you conclude about the marginal benefit and marginal cost of the first hour of skating​?

The marginal benefit of the first hour of skating exceeded its marginal cost.

We know that there have been shifts of both the demand curve for and the supply curve of a good. We also know that one end result of the changes in this market was that the equilibrium price of the good fell. Given this​ information, which combination of supply and demand changes could NOT have possibly​ occurred?

a decrease in supply and an increase in demand

Which of the following​ --- by itself​ --- causes a decrease in demand for a certain​ good?

a rise in the price of some item that is a complement of the good

What kind of efficiency are we achieving when we are producing at a point of the PPF that we prefer above all other​ points:

allocative

A cellphone and a phone call are​ ______. A text message and an email are​ ______.

complements; substitutes

Pizza and sausage are​ ______. Wheat and rye are​ ______.

complements; substitutes

Dairies make​ low-fat milk from​ full-cream milk. In the process of making​ low-fat milk, the dairies produce​ cream, which is made into ice cream. A rise in the wage rate of dairy workers​ ______ the supply of​ low-fat milk. A rise in the price of cream​ ______ the supply of​ low-fat milk.

decreases, increases

One of the first steps in deciding whether to complete your education is to:

evaluate the marginal cost and marginal benefit of that decision.

VickyVicky currently produces at point A in the figure. If VickyVicky moves from point A to point C​, her opportunity cost of a magazinemagazine ​_______. on the curve decreasing

increases

Economics:

is concerned with how people respond to incentives

The substitution effect influences food purchases because when the price of a certain food​ rises, other things remaining the​ same, ______. Consumers​ ______.

its relative price​ rises; purchase more of a different food that is less expensive

The resources provided by nature and used to produce goods and services are also known as:

land

Which of these covers the study of topics such as inflation and unemployment?

macroeconomics

Factors of production include all of the following EXCEPT​ ________.

money

The table shows​ Brazil's production possibilities for ethanol and food crops. Marginal benefit from a good or service is the benefit received from consuming​ ______. It is measured by the most that people are willing to pay for​ ______. Marginal benefit from food crops​ _______. Ethanol Food crops ​(barrels per​ day) ​(tons per​ day) 70 and 0 64 and 1 54 and 2 40 and 3 22 and 4 0 and 5

one more unit of​ it; an additional unit of it cannot be calculated from the table

The equilibrium price is the best deal available for both buyers and sellers because buyers​ ______ and sellers​ ______.

pay the highest price they are willing to​ pay; receive the lowest price at which they are willing to sell

Macroeconomics is concerned with all of the following except:

political party affiliation

Read the news​ clip, then answer the following question. A shortage in the market for oil implies that​ ______. Oil soars to new record over​ $135 In the summer of​ 2008, the price of crude oil hit a record high above​ $135 a barrel. OPEC reported that there was no shortage of oil and that speculators had forced the price up.

price adjustments are being prevented from playing their role as the regulator of buying and selling plans

Harry produces 22 balloon rides and 77 boat rides an hour. Harry couldcould produce more balloon rides without producing fewer boat rides. Harry is​ ______ his production possibilities frontier.

producing inside

What kind of efficiency do we achieve when we produce goods and services at the lowest possible​ cost?

production

Jobs alone are not the measure of economic​ well-being. If this were the​ case, then we could increase the​ well-being of an economy by giving highway workers spoons rather than backhoes and garment workers needles and thread instead of computerized sewing machines. What does provide the source of high living​ standards?

production of goods and services people value

Suppose that there is a substantial fall in the price of apples. Apples are​ (obviously) the major ingredient in apple juice. As a result of this​ event, the market for apple juice changes in this​ way: ​ ________________.

supply increases, and price falls

A supply curve​ _______.

tells us the lowest price at which someone is willing to sell or is a minimum-supply-price curve

If Americans still worked sixty hour weeks, as they did in 1890, __________.

the GDP would be much higher than it is but the well-being of the typical person would not necessarily be higher

Events in the market for a particular good are such that the market​ (equilibrium) price and market​ (equilibrium) quantity of the good move opposite direction​ (i.e., price falls as quantity​ rises, ​ and\or price rises as quantity​ falls). It must therefore be true that​ _________.

the decisive event in the marketplace is a shifting supply curve

Which of the following is​ correct? Factors of production are

the inputs used to produce goods and services.

Kelsey has three slices of pizza for lunch. The marginal benefit that Kelsey receives from the third slice of pizza is​ _______.

the maximum amount that she is willing to pay for the third slice of pizza

The table shows some of​ Brazil's production possibilities for ethanol and food crops. Marginal cost of a good is​ _______. Ethanol Food crops ​(barrels per​ day) ​(tons per​ day) 70 and 0 64 and 1 54 and 2 40 and 3 22 and 4 0 and 5 When the quantity of food produced is 2.52.5 tons a​ day, the marginal cost of producing a ton of food is 1414 barrels of ethanol.

the opportunity cost of producing one more unit of it

The income effect influences food purchases because when the price of a certain food​ rises, other things remaining the​ same, ______.

the price rises relative to​ income; cannot afford to buy all the things they previously​ bought, so they normally buy less of the food that has experienced the price rise

Real GDP is __________.

the value of final goods and services produced in a given year when valued at the prices of a reference base year

Allocative efficiency occurs when​ ______.

we are producing at a point on the PPF such that marginal benefit at the quantity produced equals marginal cost

The what​, how​, and for whom questions in economics are questions about​ ______.

what goods and services do we​ produce, how do we use the factors of production to produce these​ goods, and who consumes the goods and services that are produced

​"Kids learning business basicsKids learning business basics​" involves a​ ______ question. "Fiber replaces aluminum in airplanesFiber replaces aluminum in airplanes​" involves a​ ______ question. ; "Delta Airlines fails to reach deal with pilotsDelta Airlines fails to reach deal with pilots​" involves a ______ question.

what; how for whom

Harry enjoys tennis but wants a high grade in his economics course. Figure 1 shows​ Harry's PPF. Figure 2 shows​ Harry's marginal benefit curve for tennis. If Harry uses his time to achieve allocative​ efficiency, he plays 77 hours of tennis a week and his economics grade is 6565 percent. Harry would be​ ______ off getting a higher grade in economics because​ ______

worse; his marginal benefit from tennis would exceed his marginal cost

The slope at a line tangential to the maximum or minimum of a nonlinear curve will always be equal to:

zero

The figure shows the production possibilities frontier for a firm that produces pet food. Point A is​ ______ and point B is​ ______. This PPF​ ______ illustrate scarcity because​ ______.

​attainable; unattainable does; the firm cannot produce points outside the frontier and as the firm moves along the PPF​, it cannot produce more dog biscuits without producing less cat food

​"As fewerfewer people buy bicyclesbicycles​, the demand for bicycle helmetsbicycle helmets will decreasedecrease and the price of a helmeta helmet will increaseincrease. The riserise in the price of a bicycle helmeta bicycle helmet will increaseincrease the supply of bicycle helmetsbicycle helmets​." This statement is​ ______ because​ ______.

​false; a decreasea decrease in demand for bicycle helmetsbicycle helmets does not increaseincrease the price of a bicycle helmeta bicycle helmet and an increasean increase in the price of a bicycle helmeta bicycle helmet does not increaseincrease the supply of bicycle helmets

Before starring as Tony Stark in Iron Man​, Robert Downey Jr. had played in 45 movies that had average​ first-weekend box office revenues of a bit less than​ $5 million. Iron Man grossed​ $102 million in its first weekend. The success of Iron Man​ ______ the opportunity cost of hiring Robert Downey Jr. Movie producers now have​ ______ incentive to hire Robert Downey Jr.

​increases; more

Upper A decreaseA decrease in the demand for ramen noodlesramen noodles together with a decreasea decrease in the supply of ramen noodlesramen noodles ​______ create a surplus or a shortage of ramen noodlesramen noodles at the original price. The price of ramen noodles ramen noodles ​______.

​might; might​ fall, rise, or not change

When a shortage​ arises, the price​ ______ to its​ equilibrium, which​ _______.

​rises; decreases the quantity demanded and increases the quantity supplied

Pasta and pizza are​ ______. A video game and a laptop are​ ______.

​substitutes; complements


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