A typical indifference curve that reflects the trade-off between two goods that are not ________ or ________ has a marginal rate of substitution that falls between these two extremes.
A) "goods"; "bads"
B) perfect substitutes; perfect complements
C) opportunity costs; utility costs
D) right angles; straight lines
E) intersections; intrasections

Question

Quizplus · Accepted Answer

A typical indifference curve that reflects the trade-off between two goods that are perfect substitutes or perfect complements would have a marginal rate of substitution that either remains constant or is undefined, respectively. Therefore, the correct answer is B.

A Typical Indifference Curve That Reflects the Trade-Off Between Two