Question

True or False with Reasons:

If X and Y are substitutes of one another, then relationship between the prices of good X and demand of good Y will be shown by a curve that will slope upwards.

Answer 1

This statement is true.

Reason:

• When the price of substitute X rises, consumers tend to buy more of Y.
• Price of X and demand for Y are directly related, so the relationship curve slopes upward.