Refer to Scenario 3.3 below to answer the question(s) that follow.SCENARIO 3.3: -Mustard and mayonnaise are substitutes. -Mustard and relish are complements. -Mustard is a normal good. -During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.Refer to Scenario 3.3. The mustard recall would have caused the equilibrium price of mayonnaise to ________ and the equilibrium quantity of mayonnaise to ________.
A. increase; increase
B. decrease; increase
C. increase; decrease
D. decrease; decrease
Answer: A
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Let C = 300 + 0.75y and I = 200. Assume no government or foreign sectors. Investment needs to decrease by ________ to decrease equilibrium output by a total of $750
A) $75 B) $100 C) $150 D) $187.50
Minimum wage laws cause unemployment because the legal minimum wage is set
A) below the market wage, causing labor demand to be greater than labor supply. B) too low. C) above the market wage, causing labor demand to be greater than labor supply. D) below the market wage, causing labor demand to be less than labor supply. E) above the market wage, causing labor demand to be less than labor supply.
In the one-period valuation model, the current stock price increases if
A) the expected sales price increases. B) the expected sales price falls. C) the required return increases. D) dividends are cut.
Regulatory forbearance
A) meant delaying the closing of "zombie S&Ls" as their losses mounted during the 1980s. B) had the advantage of benefiting healthy S&Ls at the expense of "zombie S&Ls," as insolvent institutions lost deposits to health institutions. C) had the advantage of permitting many insolvent S&Ls the opportunity to return to profitability, saving the FSLIC billions of dollars. D) increased adverse selection dramatically.