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:

Direct Labor Costs

Wages and benefits paid to employees who are directly involved in the production of goods or services.

Indirect Costs

Expenses not directly tied to the production of goods or services, such as overhead, rent, and administrative salaries.

Manufacturing Environment

A setting where goods are produced on a large scale using machinery, labor, and other resources.

Factory Overhead Incurred

The total costs associated with operating a factory that are not directly related to the production, including utilities, maintenance, and property taxes.