Kiwis and Strawberries Are Substitutes for Consumers

question 54

Multiple Choice

Kiwis and strawberries are substitutes for consumers.An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of strawberries.

• A) raises; increases
• B) probably changes, but more information is needed to determine if it rises or falls; increases
• C) raises; probably changes, but more information is needed to determine if it increases or decreases
• D) lowers; probably changes, but more information is needed to determine if it increases or decreases
• E) lowers; increases

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Definitions:

Direct Labor-Hours

The total number of hours worked by employees directly involved in the manufacturing process.

Direct Materials Cost

The cost of raw materials that can be directly attributed to the production of a finished good.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific products or activities based on their consumption of resources.

Direct Labor-Hours

The total hours worked by employees directly involved in the production of goods.