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:

Full Disclosure Principle

A fundamental accounting principle requiring that financial statements provide all necessary information to stakeholders to understand a firm's financial condition.