⚡ Month End Offer is live - Get Flat 55% Off on All Courses • Grab it Now! Click Here 00:00:00 AM

    Question

    For which preferences the income offer curve

    and the price offer curve are equal?
    A Convex Correct Answer Incorrect Answer
    B Concave Correct Answer Incorrect Answer
    C Perfect substitute Correct Answer Incorrect Answer
    D Perfect complements Correct Answer Incorrect Answer
    E None Correct Answer Incorrect Answer

    Solution

    Income offer curve is a line that depicts the optimal choice of two goods at different levels of income at constant prices.

    Price offer curve is a line that depicts the optimal choice of two goods as price of 1 good change holding the price of other good and income fixed.

    For perfect complements preferences, the two curves are the same.

    Practice Next
    ask-question