Cupcakes and Granola Bars Are Substitutes in Consumption

question 171

Multiple Choice

Cupcakes and granola bars are substitutes in consumption. The price of a granola bar increases so the demand for

• A) granola bars will decrease, that is, the demand curve will shift leftward.
• B) granola bars will increase, that is, the demand curve will shift rightward.
• C) cupcakes will decrease, that is, the demand curve will shift leftward.
• D) cupcakes will increase, that is, the demand curve will shift rightward.

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Definitions:

Chi-square Statistic

A measure used in statistics to assess how well an observed distribution matches an expected distribution, used in tests of independence and goodness of fit.

Degrees of Freedom

Degrees of freedom are the number of independent values or quantities which can be assigned to a statistical distribution without violating any constraining conditions.

Category Counts

The tally or frequency of occurrences within different categories or classifications in a dataset.

Probabilities

The likelihood or chance of different outcomes occurring, based on a scale from 0 to 1, where 0 means the outcome is impossible and 1 means the outcome is certain.