Suppose Milk and Cereal Are Compliments and the Demand for Milk

question 51

Multiple Choice

Suppose milk and cereal are compliments and the demand for milk is Q^d_m = 40 - 6P_m - 2P_c,where Q^d_m stands for millions of gallons of milk demanded,P_m stands for the price of milk and P_c stands for the price of cereal.The supply of milk is Q^s_m = 6P_m - 8,where Q^s_m stands for millions of gallons of milk supplied.The demand and supply of cereal are Q^d_c = 90 - 5P_c - P_m and Q^s_c = 5P_c - 10,respectively,where Q^d_c stands for millions of boxes of cereal demanded and Q^s_c stands for millions of boxes of cereal supplied.Suppose the government imposes a $2.00 per gallon tax on milk.The new general equilibrium price of cereal is:

• A) $9.66.
• B) $9.76.
• C) $7.76.
• D) $11.76.

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Definitions:

Radical Behaviorism

A philosophy of psychology based on the premise that all behaviors are a result of the interaction between the individual and their environment, emphasizing observable behaviors over internal factors.

Radical Behaviorism

A psychological perspective emphasizing the study of observable behavior and the role of the environment as a determinant of behavior.

Legal Systems

Formal mechanisms of social control that interpret and apply laws within a society, including institutions like courts and legislatures, as well as the body of laws and regulations themselves.

Intervening Variables

Variables that act as a mediator between independent and dependent variables, explaining the relationship between them within a study.