A 10 Percent Increase in the Price of Sugar Reduces

question 27

Multiple Choice

A 10 percent increase in the price of sugar reduces sugar consumption by about 5 percent. The increase causes households to

• A) spend more on sugar.
• B) spend less on sugar.
• C) spend the same amount on sugar.
• D) consume more goods like coffee and tea that are complements of sugar.

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Definitions:

Repaid Over Time

A financial arrangement where borrowed money or debt is paid back in installments over a specified period.

Interest

Reflects the cost of borrowing money or the compensation earned through deposit funds, typically expressed as an annual percentage rate.

Intrapreneurship

The practice of fostering an entrepreneurial spirit within an existing company, encouraging employees to pursue innovative projects.

Profitable New Products

Goods or services recently introduced to the market that generate earnings exceeding their cost of production.