Substitutes and Complements

question 39

Short Answer

Substitutes and Complements. Determine whether each of the following statements is true or false. Indicate why.
A. Substitutes are goods and services that become more desirable when consumed together.
B. Complements are goods and services that can be used to fulfill a similar need or desire.
C. When goods and service can be freely but imperfectly substituted, indifference curves have a U-shape.
D. Perfect substitutes are goods and services that satisfy the same need or desire and have a L-shaped appearance..
E. Perfect complements are goods and services consumed together in the same combination and have a straight-line appearance.

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Definitions:

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A form of intellectual property right that grants the inventor exclusive rights to a new invention for a specified period.

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The obligation of individuals or organizations to act for the benefit of society at large.

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A smaller, typically more rural community in the United States, characterized by a lower population density.