Suppose Consumer Tastes and Preferences Shift from Tacos to Pizzas

question 130

Multiple Choice

Suppose consumer tastes and preferences shift from tacos to pizzas. In the short run, these changing tastes will result in pizza restaurants ________ pizza prices and taco restaurants ________ taco prices.

• A) increasing; decreasing
• B) decreasing; increasing
• C) decreasing; decreasing
• D) increasing; increasing

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Definitions:

Line of Credit

A flexible loan from a bank or financial institution that offers a maximum loan balance that can be used over time.

Demand Note

A short-term loan that must be repaid (both principal and interest) in a lump sum at maturity.

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.

Demand Note

A loan or debt instrument that is repayable on demand at the choice of the lender at any time.