Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?
A) a decrease in the price of tomatoes
B) an increase in the price of tomatoes
C) an increase in the price of mustard, a substitute for ketchup
D) an increase in the price of french fries, a complement for ketchup
Answer: B
You might also like to view...
The above figure illustrates the marginal social benefit and marginal social cost for chicken sandwiches. If the quantity is decreased from 6 to 3 and the price increases from $3 to $4, consumer surplus will decrease by
A) $1.50. B) $2.00. C) $3.00. D) $4.50.
An effluent fee
A) is a reward to companies using production methods that create positive externalities. B) is also called a pollution subsidy. C) gives a firm the right to pollute if it pays a tax on what it discharges. D) is intended to influence the market by increasing supply and decreasing price.
The lemons problem occurs mainly because of
A) asymmetric information. B) a market failure. C) negative externality. D) a monopoly.
Both the International Monetary Fund and the World Bank were established
A) at the end of World War I. B) at the end of World War II. C) in the 1960s. D) in the 1970s.