If milk and cookies are complements and the price of cookies rises, we would expect to see:
A. a decrease in the quantity demanded for milk but no change in demand.
B. an increase in the demand for milk.
C. an increase in the quantity demanded for milk but no change in demand.
D. a decrease in the demand for milk.
Answer: D
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Refer to Table 9-10
a. Which person has an absolute advantage in the production of pens? pencils? b. Which person has a comparative advantage in the production of pens? c. Which person has a comparative advantage in the production of pencils?
As output increases, the ATC
a. increases. b. decreases. c. remains constant. d. falls and then rises.
Considering the euro/U.S. dollar exchange rate, as a U.S. dollar decreases in value versus the euro (holding other factors constant):
A. this is represented by an upward movement along the demand for dollars curve. B. this is represented by a downward movement along the supply of dollars curve. C. this would be represented by an upward sloping demand for dollars curve. D. this would be represented by a leftward shift of the supply of dollars curve.
If the MPC is 0.75, and the government cuts spending by $100b, the overall effect on GDP will be:
A. an increase of $400b. B. a decrease of $250b. C. a decrease of $400b. D. an increase of $250b.