If Coffee and Cream Are Complements, an Increase in the Price

question 62

Multiple Choice

If coffee and cream are complements, an increase in the price of coffee will cause

• A) the demand for cream to increase.
• B) the demand for cream to fall.
• C) the demand for coffee to fall.
• D) no change in the demand for cream; only quantity demanded would be affected.

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Definitions:

Work Sheet

A document used in accounting to gather information from ledger accounts for the preparation of financial statements.

Temporary Accounts

Accounts used to collect revenues, expenses, and dividends information which are then transferred to permanent accounts at the end of the accounting period.

Closed

Refers to an account or period that has been concluded and no longer accepts entries or transactions.

Accrual Basis

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash is exchanged.