Potato Chips and Popcorn Are Substitutes

question 22

Multiple Choice

Potato chips and popcorn are substitutes. A subsidy for potato chips will ______the demand for popcorn and the quantity of popcorn sold will ______.

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) decrease; increase

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Definitions:

Margarine

A spread used as a substitute for butter, made from vegetable oils or animal fats.

Producer Surplus

The difference between what producers are willing to sell a good for and the price they actually receive.

Price

The amount of money exchanged for a product or service, reflecting its value in a particular market.

Area Representation

The method of visually or mathematically depicting defined spaces or regions to convey information or data related to them.