"Because Chips and Salsa Are Complements, an Increase in the Price

question 3

Multiple Choice

"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease.This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement?

• A)The statement will be true if consumer tastes for chips and salsa do not change.
• B)The statement is false because a change in the price of chips would not change the demand for chips.
• C)The statement is false because salsa is an inferior good; chips are normal goods.
• D)The statement is false because one cannot assume that chips and salsa are complements for all consumers.

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Definitions:

Reference Group

A group that individuals compare themselves to for the purpose of evaluating their behaviors, attitudes, and norms.

Imagined Community

A concept describing how members of a social group or nation perceive themselves as part of a larger community through shared symbols, languages, and media, despite not knowing all members personally.

Formal Organizations

Structured groups established for a particular purpose or set of objectives, often characterized by a hierarchy and formal rules.

Bureaucratic Inefficiency

occurs when administrative processes and procedures in organizations or governments are slow, overly complicated, or inefficient, leading to delays and increased costs.