Which of the following statements is not true?
A) If tea and coffee are perfect substitutes in your consumption, then you will only consume
the good with the lowest
B) If tea and coffee are perfect substitutes in your consumption, then you will consume some
quantity of both goods if the prices of tea and coffee are equal.
C) You view coffee and donuts as perfect complements, and the corners of your indifference
are positive, you will not choose a corner solution.
D) You view coffee and donuts as perfect complements, and the corners of your indifference
curves follow the 45-degree line. You will consume coffee and donuts at some point along
the 45-degree line where your MRS equals the price ratio for the two goods.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
