If the price of "X" increases and you buy more "Y," then
A. "X" and "Y" are complements, and the price of "Y" will decrease.
B. "X" and "Y" are substitutes, and the price of "Y" will decrease.
C. "X" and "Y" are complements, and the price of "Y" will increase.
D. "X" and "Y" are substitutes, and the price of "Y" will increase.
Answer: D
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Suppose initially the federal budget is balanced. The economy then enters a period of expansion. What is likely to happen to the federal budget?
A) It will remain balanced. B) It will show a deficit. C) It will automatically stabilize. D) It will show a surplus.
The cost of producing each bottle of a certain brand of shampoo is $0.25. If the market for shampoo is monopolistically competitive and demand for shampoo is inelastic, a manufacturer who charges $0.35 for each bottle will ________
A) shut down production in the short run B) exit the industry in the long run C) earn an economic profit of $0.10 per bottle D) earn a total revenue of $0.10 per bottle
When marginal private cost is equal to marginal social cost,
A. the activity in question generates no positive externality. B. the activity in question generates no negative externality. C. all positive externalities have been internalized. D. all negative externalities have been internalized. E. b or d
Imagine that Wingate National is a new bank, and that the legal reserve requirement is 10 percent. If it accepts a $1,000 deposit, then its required reserves balance is
a. $0 b. $90 c. $100 d. $900 e. $910