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. Initially, the price of hot dogs is $3 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. How does her optimal consumption bundle change if the price of hot dog buns increases to $5 per package? A) She buys the same amount of hot dog buns and buys more hot dogs. B) Sue does not change her consumption because these goods are perfect complements. C) She reduces her consumption by 2 packages of hot dogs and 2 packages of hot dog buns. D) She buys the same amount of hot dogs and buys two less packages of hot dog buns.
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. Initially, the price of hot dogs is $3 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. How does her optimal consumption bundle change if the price of hot dog buns increases to $5 per package? A) She buys the same amount of hot dog buns and buys more hot dogs. B) Sue does not change her consumption because these goods are perfect complements. C) She reduces her consumption by 2 packages of hot dogs and 2 packages of hot dog buns. D) She buys the same amount of hot dogs and buys two less packages of hot dog buns.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
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. Initially, the
price of hot dogs is $3 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. How does her optimal
consumption bundle change if the price of hot dog buns increases to $5 per
package?
A) She buys the same amount of hot dog buns and buys more hot dogs.
B) Sue does not change her consumption because these goods are perfect
complements.
C) She reduces her consumption by 2 packages of hot dogs and 2 packages of
hot dog buns.
D) She buys the same amount of hot dogs and buys two less packages of hot
dog buns.
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