Suppose the Price of X Increases by 20 Percent While

question 161

Multiple Choice

Suppose the price of X increases by 20 percent while the quantity demanded of Y does not change. We would conclude that

• A) the two goods are substitutes, but the cross elasticity of demand is not large.
• B) the two goods are complements, but the cross elasticity of demand is not large.
• C) the two goods are perfect substitutes.
• D) the two goods are not related.

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Definitions:

Horses

Large, four-legged animals domesticated for riding, work, and sports, known for their speed and strength.

Spanish Power

Refers to the period of Spanish global dominance from the late 15th to early 17th centuries, characterized by vast colonial expansion, wealth from the Americas, and military strength.

Military Strength

The capacity and capabilities of armed forces to conduct operations, including personnel, equipment, and logistical support.

Presidio

A fortified military settlement used in Spain and the Spanish Empire, often in areas under threat of invasion or attack.