The correct answer is: A. X and Y will be substitute goods.
Substitute goods are goods that can be used in place of each other. When the price of one substitute good increases, the demand for the other substitute good will increase. This is because consumers will switch to the other substitute good in order to save money.
In this case, the price of good Y increases and the price of good X remains the same. This means that good Y is now more expensive relative to good X. As a result, consumers will switch to good X in order to save money. This increase in the demand for good X is evidence that good X and good Y are substitute goods.
Here is a brief explanation of each option:
- B. X and Y will be complementary goods. Complementary goods are goods that are used together. When the price of one complementary good increases, the demand for the other complementary good will decrease. This is because consumers will buy less of the good that is now more expensive, which will lead to a decrease in the demand for the good that is used with it.
In this case, the price of good Y increases and the price of good X remains the same. This means that good Y is now more expensive relative to good X. However, this does not necessarily mean that the demand for good X will decrease. In fact, it is possible that the demand for good X will increase, as consumers switch to good X in order to save money. This is because good X is not a complementary good to good Y.
- C. X and Y will be independent objects/goods. Independent goods are goods that are not related to each other. When the price of one independent good increases, the demand for the other independent good will not be affected.
In this case, the price of good Y increases and the price of good X remains the same. This means that good Y is now more expensive relative to good X. However, this does not necessarily mean that the demand for good X will increase or decrease. In fact, it is possible that the demand for good X will remain unchanged, as good X is not related to good Y.
- D. None of the above. This option is not correct, as it does not provide a complete explanation of the relationship between good X and good Y.