If Goods X and Y Are Substitute Goods, Then an Increase

question 213

Multiple Choice

If goods X and Y are substitute goods, then an increase in the price of Y, other things being equal,

• A) results in a decrease in the amounts of both X and Y consumed.
• B) decreases the quantity demanded of Y, but has no effect on the amount of X consumed.
• C) results in a decrease in the quantity of Y consumed, but increases the demand for X.
• D) has no real effect on the quantity demanded of good Y, but increases the demand for X.

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Definitions:

Control Group

In scientific experiments, a group of subjects that does not receive the treatment being tested, used for comparison purposes with the group that does receive the treatment.

Independent Variable

In an experiment, the variable that is manipulated by the researcher to observe its effects on the dependent variable.

Dependent Variable

The variable in an experiment that is observed and measured for changes to assess the effect of manipulations in the independent variable.

Psychological Experiment

A research method in psychology that tests hypotheses and theories by observing the outcomes of controlled interventions on human or animal subjects.