If an Increase in the Price of Good X Leads

question 162

Multiple Choice

If an increase in the price of good X leads to a decrease in the consumption of good Y,then goods X and Y are called

• A) substitutes.
• B) complements.
• C) normal goods.
• D) inferior goods.

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Definitions:

True Values

Refers to the actual, inherent value or worth of an item, property, or financial instrument, as opposed to its market price or cost.

Just over

Slightly more than a specified amount, number, or degree.

Consumer Surplus

The discrepancy between what consumers are ready and able to spend on a good or service and the amount they end up paying.

Producer Surplus

The difference between the amount that producers are willing to accept for a good or service and the actual amount they receive.