When Two Goods Are Perfect Substitutes, the

question 57

Multiple Choice

When two goods are perfect substitutes, the

• A)indifference curve is a downward-sloping straight line.
• B)marginal rate of substitution is constant.
• C)indifference curve is a vertical straight line.
• D)Both a and b are correct.

---

Definitions:

Perpetual Inventory System

An accounting method where goods are recorded as sold immediately through the use of computer systems, providing a continuous record of inventory.

Gross Price Method

An accounting practice where inventory and purchases are recorded at their full cost without deducting trade discounts.

Catalog Price

The listed price of items for sale as published in a catalog, not accounting for any discounts or promotions that might apply.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including repayment timeline, interest rate, and any other charges.