Which of the following would cause the equilibrium price of ketchup to increase and the equilibrium quantity of ketchup to decrease?
A) an increase in the price of mustard, a substitute for ketchup
B) a decrease in the price of tomatoes
C) an increase in the price of tomatoes
D) an increase in the price of french fries, a complement for ketchup
C
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In the above figure, the economy is initially at point B. If taxes increase, there is
A) a movement to point C. B) a movement to point A. C) a shift to AD2. D) a shift to AD1.
Why do people hold money (currency and checking account balances), and thereby forgo earning interest or dividends from a financial investment?
a. Some money is demanded for everyday transactions like parking fees, lunch, and buying groceries. b. Some money is demanded as a precaution against unexpected costs such as automobile repairs, speeding tickets, or temporary loss of a job. c. Some money is demanded for speculative purchases of stocks, bonds, or collectibles in case they become available at a particularly low price. d. All of the above are correct.