Sugar and honey are viewed as substitutes for each other in many recipes. If the price of sugar rises, we would expect:
Ans: the demand for honey to increase.
You might also like to view...
If a good is price inelastic, an increase in price will decrease total revenues
Indicate whether the statement is true or false
If a consumer prefers Apples to Bananas and prefers Bananas to Citrus Fruit, in order to satisfy assumptions about preferences, she has to prefer
A) Bananas to Apples. B) Citrus Fruit to Bananas. C) Apples to Citrus Fruit. D) Citrus Fruit to Apples.
Nondiscriminating monopoly is similar to perfect competition in that
a. they have the same level of barriers to entry b. they have a similar number of firms in the industry c. the demand curve facing the firm is perfectly elastic for both d. price equals marginal revenue for both e. price equals average revenue for both
Suppose that an individual consumes just two goods: Big Macs and milkshakes. In order to reach consumer equilibrium, the individual must arrange the consumption of Big Macs and milkshakes so that the:
a. marginal utility of the two goods is equal for the last dollar spent on each good. b. ratio of marginal utility to price is the same for both goods for the last dollar spent on each good. c. ratio of marginal utility of milkshakes to the marginal utility of Big Macs is 1 for the last dollar spent on each good. d. price paid for the two goods is the same.