Asked by
Benjamin Shaffer
on Dec 04, 2024Verified
Based on Figure 3.1.6 above, it can be inferred that:
A) Alvin does not consider good X as "good."
B) Alvin will never purchase any of good Y.
C) Alvin regards good X and good Y as perfect substitutes.
D) Alvin regards good X and good Y as perfect complements.
E) none of the above
Perfect Substitutes
Goods or services that can be used in place of each other with no loss of utility to the consumer.
Perfect Complements
Two goods for which the Marginal Rate of Substitution (MRS) is zero or infinite; the indifference curves are shaped as right angles.
Good X
A generic term often used in economic models to represent a specific product or commodity in the market.
- Understand the concept of consumer preferences and how they are represented in economic models.
Verified Answer
AS
Learning Objectives
- Understand the concept of consumer preferences and how they are represented in economic models.