Multiple Choice
Which of the following statements is not true?
A) If tea and coffee are perfect substitutes in your consumption, then you will only consume the good with the lowest price.
B) If tea and coffee are perfect substitutes in your consumption, then you will consume some quantity of both goods if the prices of tea and coffee are equal.
C) You view coffee and donuts as perfect complements, and the corners of your indifference curves follow the 45-degree line. As long as your income and the prices of coffee and donuts are positive, you will not choose a corner solution.
D) You view coffee and donuts as perfect complements, and the corners of your indifference curves follow the 45-degree line. You will consume coffee and donuts at some point along the 45-degree line where your MRS equals the price ratio for the two goods.
Correct Answer:

Verified
Correct Answer:
Verified
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