If Milk and Cookies Are Complements and the Price of Cookies

question 57

Multiple Choice

If milk and cookies are complements and the price of cookies rises, we would expect to see:

• A) an increase in the demand for milk.
• B) a decrease in the demand for milk.
• C) an increase in the quantity demanded for milk but no change in demand.
• D) a decrease in the quantity demanded for milk but no change in demand.

---

Definitions:

Stockholders' Equity

The owners' residual interest in a corporation, calculated as the difference between the company's total assets and total liabilities.

Par Value

The face value of a bond or stock as stated by the issuer, which does not necessarily reflect its market value.

Redemption Value

The amount that an investment instrument, such as a bond, is worth at its maturity or when it is redeemed.

Stated Value

Arbitrary value placed by the board of directors on each share of no-par stock to fulfill legal capital requirements.