Asked by
Addison Hildebrandt
on Dec 04, 2024
Verified
Sue views hot dogs and hot dog buns as perfect complements in her consumption, and the corners of her indifference curves follow the 45-degree line. Suppose the price of hot dogs is $5 per package (8 hot dogs) , the price of buns is $3 per package (8 hot dog buns) , and Sue's budget is $48 per month. What is her optimal choice under this scenario?
A) 8 packages of hot dogs and 6 packages of buns
B) 8 packages of hot dogs and 8 packages of buns
C) 6 packages of hot dogs and 6 packages of buns
D) 6 packages of hot dogs and 8 packages of buns
Perfect Complements
Goods that are always used together in fixed proportions, where the utility of one item increases with the use of the other.
Indifference Curves
Graphical representations in economics showing different combinations of goods or services among which a consumer is indifferent, demonstrating preferences.
Optimal Choice
The best possible decision or selection made from a set of alternatives, given the constraints and objectives at hand.
- Comprehend the effect that perfect substitutes and complements have on consumer equilibrium.
Verified Answer
TS
Learning Objectives
- Comprehend the effect that perfect substitutes and complements have on consumer equilibrium.