A Consumer Considers Coke and Pepsi to Be Perfect Substitutes

question 61

Multiple Choice

A consumer considers Coke and Pepsi to be perfect substitutes for each other. What would the consumer's indifference curves for these two goods look like?

• A)L-shaped
• B)horizontal along the entire length
• C)vertical along the entire length
• D)upward sloping
• E)downward sloping with a constant slope

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Definitions:

Purchase Contract

A legal agreement between a buyer and a seller detailing the terms and conditions of a purchase.

Return

The profit or loss generated from an investment over a certain period of time.

Compounded Annually

A compound interest calculation made once per year.

Economic Equivalent

A theoretical figure representing the total cost or value of an asset, taking into account factors like inflation, interest rates, and opportunity cost.