[amp_mcq option1=”Straight line” option2=”L-shaped” option3=”U-shaped” option4=”C-shaped” correct=”option1″]<\/p>\n
The correct answer is A. Straight line.<\/p>\n
An indifference curve is a graph that shows all the combinations of goods that a consumer is indifferent between. In the case of two perfect substitutes, the consumer is indifferent between any two combinations of the goods that have the same total utility. This means that the indifference curve will be a straight line, since the consumer is willing to trade one good for the other at a constant rate.<\/p>\n
Option B is incorrect because an L-shaped indifference curve would imply that the consumer is not willing to trade one good for the other at all. This is not the case for two perfect substitutes.<\/p>\n
Option C is incorrect because a U-shaped indifference curve would imply that the consumer prefers more of both goods to less of both goods. This is not the case for two perfect substitutes, where the consumer is indifferent between any two combinations of the goods that have the same total utility.<\/p>\n
Option D is incorrect because a C-shaped indifference curve would imply that the consumer prefers more of one good to less of the other, but only up to a point. After that point, the consumer prefers less of the good. This is not the case for two perfect substitutes, where the consumer is indifferent between any two combinations of the goods that have the same total utility.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Straight line” option2=”L-shaped” option3=”U-shaped” option4=”C-shaped” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-59158","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n