Let's talk about fuel oil. I try to be modest at keeping the house warm. Sweaters, heavy comforters, quick showers (the Navy kind) and yet the bill that came in lately was for a tad less than $1K. I guess "hot under the collar" helps out. But a "sweater" does not actually lead there...
Yikes! I know our natural gas bill was about 50% higher than this time last year, due to rising costs (even though I locked in a rate, still much higher, but better than the variable, market-driven rate).
As my father used to say, "Wear a sweater"!
Wool and heating oil [diesel] are substitutes. [For most of us. The relations are properties of us, not of the goods. I don't mix diesel into my breakfast cereal. Some may, though.]
Substitutes of substitutes are substitutes. Substitutes of complements are complements. Complements of complements are complements.
When I started out graduate study I was a TA, holding discussion sessions and doing all the grading. We're talking very early 1970's. One question on the final exam in Econ 101 was:
The Canadian government is thinking of legalizing marijuana. The beer and wine industries are in favor. The distilled liquor industry is against. Using the concepts of "substitutes" and "complements", explain why this is rational [i.e. self-interested] behavior.
One student wrote: There is nothing better than to have a bottle of Boone's Farm Apple Wine in one hand and a joint in the other.
Naturally, I awarded full credit.
