If Goods X and Y Are Substitutes, If the Price

question 16

Multiple Choice

If Goods X and Y are substitutes, if the price of Good X decreases, this will cause a movement _________the demand curve for Good X and a __________ shift in the demand for Good Y.

• A)up; leftward
• B)up; rightward
• C)down; leftward
• D)down; rightward

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Definitions:

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often referred to as the "I-knew-it-all-along" phenomenon.

Self-fulfilling Prophesy

A prediction that directly or indirectly causes itself to become true, by the very terms of the prophecy itself, due to positive feedback between belief and behavior.

Rationalization

A defense mechanism where logical, acceptable explanations are given for behaviors that are actually driven by subconscious motives.

Thematic Apperception Test

A projective psychological test that asks respondents to tell stories about ambiguous pictures, aimed at uncovering their underlying thoughts, feelings, and attitudes.