The Impact of Price Changes on Perfect Complements
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Questions and Answers

Which of the following is true when Good 1 and Good 2 are perfect complements?

  • An increase in the price of Good 2 increases the optimal quantity of Good 2 consumed
  • An increase in the price of Good 1 increases the optimal quantity of Good 2 consumed (correct)
  • An increase in the price of Good 2 decreases the optimal quantity of Good 1 consumed
  • An increase in the price of Good 1 decreases the optimal quantity of Good 1 consumed

    • What happens to the optimal quantity of Good 1 consumed when the price of Good 1 decreases?

  • The optimal quantity of Good 2 consumed decreases
  • The optimal quantity of Good 1 consumed remains the same
  • The optimal quantity of Good 1 consumed increases (correct)
  • The optimal quantity of Good 1 consumed decreases

    • What type of relationship exists between Good 1 and Good 2 when they are perfect complements?

  • Complementary goods (correct)
  • Inferior goods
  • Substitute goods
  • Normal goods

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