Q288
If two goods were perfect substitutes of each other, it necessarily follows that
A.
An indifference curve relating the two goods will be curvilinear
B.
An indifference curve relating the two goods will be linear
AnswerC.
An indifference curve relating the two goods will be divided into two segments which meet at a right angle
D.
An indifference curve relating the two goods will be convex to the origin
Answer: Option B
Solution
Answer: Option B
Solution:
If two goods were perfect substitutes of each other, it necessarily follows that an indifference curve relating the two goods will be linear. As price rises for a fixed money income, the consumer seeks the less expensive substitute at a lower indifference curve.