Bagels and Cream Cheese Are Complementary Goods

question 153

Multiple Choice

Bagels and cream cheese are complementary goods.Suppose that the price for flour,which is used to produce bagels,increases.The equilibrium price of cream cheese ________,and the equilibrium quantity of cream cheese ________.

• A) rises; decreases
• B) rises; increases
• C) falls; decreases
• D) does not change; does not change
• E) falls; increases

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Definitions:

Inventory

The goods and materials held by a business for the purpose of sale, manufacturing, or production.

Plant Insurance

Insurance coverage specifically designed to protect the physical assets of a manufacturing or production facility, including buildings and machinery.

Indirect Materials

Materials used in the production process, but cannot be directly linked to a specific product.

Indirect Labor

Costs for labor that are not directly associated with the production of goods or delivery of services, such as maintenance staff.