If the price of "X" increases and you buy more "Y," then
A. "X" and "Y" are complements, and the price of "Y" will increase.
B. "X" and "Y" are substitutes, and the price of "Y" will increase.
C. "X" and "Y" are substitutes, and the price of "Y" will decrease.
D. "X" and "Y" are complements, and the price of "Y" will decrease.
Answer: B
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A) bus rides B) cholesterol medication in general C) gasoline D) iPhones
Which of the following is an underlying assumption of the aggregate expenditure model?
a. Everyone shares equally in profits when income exceeds the cost of producing goods and services. b. The economy does better when income exceeds expenditure. c. Equilibrium is a hypothetical state that can never be reached. d. If there were no output in the economy, then there would be no income.