An indifference curve of the perfect substitutes:

Question

BlackTom AI · Accepted Answer

First, let's restate the question and the provided options to set the stage for analysis. Question: 'An indifference curve of the perfect substitutes:' Options: a. has L-shape. b. is a line with a negative slope. c. is a vertical line. d. is a curve with a positive slope.

Option a: 'has L-shape.' This description matches perfect complements rather than perfect substitutes. Indifference curves for perfect substitutes are not L-shaped; L-shapes arise when goods are perfect complements (you only value them in fixed proportions). So this is incorrect.

Option b: 'is a line with a negative slope.' This correctly describes indifference curves for perfect substitutes. When two goods are perfect substitutes, the consumer is willing to substitute one for another at a constant rate, producing a straight-line indifference curve with a negative slope. This option is correct.

Option c: 'is a vertical line.' A vertical indifference curve would imply that the quantity of one good is fixed and completely determines utility, which is not the case for perfect substitutes. This would indicate no substitution along the axis, which contradicts the notion of substitutability. Therefore, this is incorrect.

Option d: 'is a curve with a positive slope.' A positive-sloped indifference curve would imply that higher quantities of both goods increase utility in the same direction, violating the standard downward-sloping property of indifference curves in standard preference theory. For substitutes, the slope is negative, so this is incorrect.

To summarize the reasoning across options: the hallmark of perfect substitutes is a straight, downward-sloping (negative slope) indifference curve, reflecting a constant marginal rate of substitution. The other shapes—L-shaped, vertical, or positively sloped curves—do not capture the substitution pattern described by perfect substitutes and correspond to other preference structures.

SESS0007_24-25 LSA Test

An indifference curve of the perfect substitutes:

View Explanation

Log in for full answers

Similar Questions

Edgeworth

An indifference curve represents bundles of goods that a consumer (choose all correct answers):

Suppose Abed’s indifference curves for two goods are shown by the figure below. What must be true about Abed’s consumer behaviour?

Indifference curves that are perfect right angles, like in the diagram, violate:

Indifference curves that are perfect right angles, like in the diagram, violate:

An indifference curve represents bundles of goods that a consumer (choose all correct answers):

An indifference curve represents bundles of goods that a consumer (choose all correct answers):

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler