If the indifference curves between two goods are L-shaped, the goods are
A) complementary goods.
B) substitute goods.
C) normal goods.
D) inferior goods.

Question

Quizplus · Accepted Answer

Indifference curves that are L-shaped indicate that the two goods are complementary. This means that as the quantity consumed of one good increases, the quantity consumed of the other good also increases, and the consumer is only willing to consume the two goods in specific proportions. For example, if the two goods are coffee and cream, a consumer may be indifferent between consuming 1 cup of coffee with 1 teaspoon of cream and consuming 2 cups of coffee with 2 teaspoons of cream. These goods are complementary because the consumer values the consumption of both goods together more than the consumption of either good alone.

If the Indifference Curves Between Two Goods Are L-Shaped, the Goods