Answer to Question #108499 in Microeconomics for hissa

Question

True or False
If there is a consumer who faces two consumption bundles Z1 and Z2, where Z2 is alternative to Z1. Both lie on the same indifference curve I. so the consumer should consider Z1 and Z2 to be perfect complements

Answer 1

The answer is false.

An indifference curve is a curve that shows different combination of goods that offers equal utility. Since Z1 and Z2 are alternative means that these bundles are substitutes goods. The indifference curve of perfect substitute goods is always downward slopping and the bundles lie along the same indifference curve. In case bundle Z1 and Z2 were perfect complement the indifference curve could be L-shaped. Therefore, bundle Z1 and Z2 are perfect substitute goods and not perfect compliment.