Asked by
Lorenz Herrmann
on Oct 27, 2024Verified
Two goods in an individual's consumption bundle are perfect substitutes.For a given amount of income,the individual's optimal consumption bundle will contain:
A) exactly 50% of each of the two goods.
B) only the good with the lower price.
C) only the good with the higher price.
D) all of the good on the horizontal axis.
Perfect Substitutes
Goods that can be used in place of one another with no loss of satisfaction by consumers.
Optimal Consumption Bundle
The blend of items and services that enhances a buyer's fulfillment to the fullest within their spending ability.
Consumption Bundle
A combination of goods and services that a consumer chooses to consume within a given time period.
- Determine the impact of perfect complements and substitutes on consumer choice.
Verified Answer
RH
Learning Objectives
- Determine the impact of perfect complements and substitutes on consumer choice.