Assume Coke and Pepsi are substitutes. Holding other things constant, if the price of Coke increases
a. Demand for Pepsi falls
b. Demand for Pepsi increases
c. Quantity demanded for Pepsi falls
d. Quantity demanded for Pepsi increases
b
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A budget constraint represents the:
A) inequality in the incomes earned by various economic agents. B) aggregate income earned by all the firms in an economy. C) total money income that an agent earns in different time periods. D) goods and services an economic agent can choose given her limited income.
Suppose that the demand for electricity has been found to be price inelastic. The most likely explanation for this finding is that:
A. few substitutes for electricity exist. B. electricity is sold in a monopoly market. C. electricity is a luxury good. D. the fraction of income spent on electricity is large.
The relative concept of poverty is based on how far behind average income a particular family gets.
Answer the following statement true (T) or false (F)
Suppose the real interest rate in Brazil is 40 percent, actual inflation is 20 percent, and expected inflation is 20 percent. The nominal interest must then be:
A. 40 percent. B. 80 percent. C. 60 percent. D. 20 percent.