Tomato Sauce and Spaghetti Noodles Are Complementary Goods

question 33

Multiple Choice

Tomato sauce and spaghetti noodles are complementary goods. A decrease in the price of tomatoes will

• A)increase consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles.
• B)increase consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles.
• C)decrease consumer surplus in the market for tomato sauce and increase producer surplus in the market for spaghetti noodles.
• D)decrease consumer surplus in the market for tomato sauce and decrease producer surplus in the market for spaghetti noodles.

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Definitions:

Fair Value Adjustment

A process of adjusting the book value of an asset or liability to reflect its current market value, used in accounting to ensure the fair presentation of financial statements.

Trading Portfolio

A collection of financial assets, such as stocks or bonds, held by an institution or individual for the purpose of realizing profits from short-term price movements.

Unrealized Gain or Loss-Income

The increase or decrease in the value of an investment that has not yet been sold for a profit or loss.

Other Expenses

Costs incurred by a business that do not fit into primary operational categories, such as administrative or selling expenses.