If the Price of "X" Increases and You Buy Less

question 35

Multiple Choice

If the price of "X" increases and you buy less "Y," then

• A)"X" and "Y" are complements,and the price of "Y" will increase.
• B)"X" and "Y" are complements,and the price of "Y" will decrease.
• C)"X" and "Y" are substitutes,and the price of "Y" will increase.
• D)"X" and "Y" are substitutes,and the price of "Y" will decrease.

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Definitions:

Acid-test Ratio

A financial metric that evaluates a company's ability to pay off short-term liabilities with its most liquid assets, excluding inventory.

Debt-to-equity Ratio

An indicator showing the comparative levels of shareholders' equity and debt utilized in the financing of a company's assets.

Times Interest

A financial ratio that measures a company's ability to meet its interest obligations, calculated by dividing earnings before interest and taxes (EBIT) by the interest expenses.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by stockholders’ equity, indicating the level of debt used to finance assets.