Vodka and Whiskey Are Considered by Consumers to Be Substitutes

question 19

Multiple Choice

Vodka and whiskey are considered by consumers to be substitutes. What is the likely economic impact of a decrease in the price of whiskey?

• A) a decrease in the supply of whiskey
• B) a movement down along the demand curve for vodka
• C) a leftward shift of the demand curve for vodka
• D) a movement up along the demand curve for vodka

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Definitions:

Cash Dividends

A portion of a company's earnings that is paid to shareholders, typically in the form of cash.

Net Cash

The total amount of cash and cash equivalents minus any liabilities or financial obligations a company has at any point in time.

Operating Activities

Transactions and other events that affect the net income of a company, involving the primary revenue-generating activities such as sales and expense payments.

Cash Dividend

A payment made by a company out of its profits to its shareholders, usually in cash.