Sue views hot dogs and hot dog buns as perfect complements in her consumption, and the corners of her indifference curves follow the 45-degree line. Suppose the price of hot dogs is $5 per package (8 hot dogs), the price of buns is $3 per package (8 hot dog buns), and Sue's budget is $48 per month. What is her optimal choice under this scenario?

Question

Quizplus · Accepted Answer

Sue's optimal choice is to buy an equal number of hot dog and bun packages because they are perfect complements. With a budget of $48, she can buy 6 packages of each, as 6($5) + 6($3) = $48.

Sue Views Hot Dogs and Hot Dog Buns as Perfect