CFA Practice Question

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CFA Practice Question

Assume both chicken and beef are normal goods. If the price of chicken rises and the price of beef doesn't rise, consumers will respond by ______.

A. substituting beef for chicken
B. substituting chicken for beef
C. reducing purchases of beef and chicken
Correct Answer: B

If the price of chicken has risen but the price of beef has not, the quantity of chicken demanded will fall as consumers substitute chicken for beef.

User Contributed Comments 10

User Comment
jferringer they would buy less chicken because price is rising, and buy more beef instead...
dmfz They like to eat at chick-fil-a
schweitzdm "Substituting chicken for beef" implies that the chicken is replacing beef. Quantity demanded for beef would rise while falling for chicken

Substitute X for Z = Replace Z with X
mike Substitute..for..: first replaces second.
Substitute..with..: second replaces first.
Replace..with..: second replaces first. second replaces first.
nachaparia In the textbook a lot of examples are "x for y" and they all have implied replacing "Y with X". In this case shouldnt the answer then be "A" ? substitute chicken with beef?
plablonde1 the options read funny, but this is how i now read them
a - beef will be substituted with chicken/chicken will replace beef
b - chicken will be substituted with beef/beef will replace chicken

therefore, the correct answer is B since the rising price of chicken will increase quantity demanded for beef.
cindydangj yeah the english for this answer is wrong lol.
sshetty2 Yea it should say substitute out* chicken for beef
ewantanner I'm with dmfz on this one. Chick-fil-a must be doing something to increase demand even though the price is rising.
romano0857 shouldn't the question add in: "assuming chicken and beef are subsitute goods"
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