Using proper economic terminology, describe why Mexican restaurants often provide chips and salsa for free to their customers
When restaurant owners provide chips and salsa for free to their customers, the quantity demanded of chips and salsa will be higher than if they were to charge for them. As customers eat more chips and salsa, they will tend to purchase drinks (such as beer) to go along with them. As happens when goods are complements, the decrease in the price of chips and salsa will lead to an increase in the demand for beer. Since an increase in the demand for a product causes that product's price to rise, the restaurant can then charge a higher price for beer.
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In the traditional Keynesian model, if the government cuts current taxes
A) the C + I + G + X line will shift down but the aggregate demand curve will not shift. B) the C + I + G + X line will shift down and the aggregate demand curve will shift to the left. C) the C + I + G + X line will shift up and the aggregate demand curve will shift to the right. D) the C + I + G + X line will shift up but the aggregate demand curve will not shift.
A survey in a particular city reveals that a majority of the retired workforce, aged between 60 years and 70 years, is returning to work to meet certain financial constraints. Other things constant, this is likely to: a. cause an upward movement along the labor supply curve. b. shift the supply curve of labor rightward
c. cause a downward movement along the labor supply curve. d. shift the supply curve of labor leftward.
Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000 . The annual explicit costs of the materials used to make the cookie jars are $54,000 . Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. What is Christine's annual opportunity cost of the
financial capital that she invested in her business? a. $5 b. $50 c. $100 d. $200
Because of NAFTA, the U.S. shifts some of its imports from Japan to Mexico (a member of NAFTA). This is an example of
A. trade deflection. B. trade diversion. C. protectionism. D. rules of origin.