Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, X and Y are goods and indifference curve is bowed inward towards origin X and Y are perfect substitutes and indifference curve is bowed inward towards origin. OX and Y are goods and indifference curves are lines since marginal rate of substitution is constant. X and are perfect complements and indifference curves are L shaped

Suppose consumers use k units of good X and w units of good Y in fixed proportion. Then, X and Y are goods and indifference curve is bowed inward towards origin X and Y are perfect substitutes and indifference curve is bowed inward towards origin. OX and Y are goods and indifference curves are lines since marginal rate of substitution is constant. X and are perfect complements and indifference curves are L shaped

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.14P

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