Which of the following pairs of goods is an example of substitutes? (a) Tea and sugar (b) Tea and coffee (c) Pen and ink (d) Shirt & trouser
Answers
b) tea and coffee
if supply of tea is decreaced, demand will shift to coffee
Answer:
Concept:
In microeconomics, two goods are substitutes if the products could be used for the same purpose by the consumers.That is, a consumer perceives both goods as similar or comparable, so that having more of one good causes the consumer to desire less of the other good.
Find:
Which of the following pairs of goods is an example of substitutes?
(a) Tea and sugar
(b) Tea and coffee
(c) Pen and ink
(d) Shirt & trouser
Given:
Which of the following pairs of goods is an example of substitutes?
(a) Tea and sugar
(b) Tea and coffee
(c) Pen and ink
(d) Shirt & trouser
Explanation:
(b) Tea and coffee
Tea and coffee pairs of commodities is an example of substitutes. This is a negative relationship, as is true for all pairs of goods that are complements.
In microeconomics, two goods are substitutes if the products could be used for the same purpose by the consumers. That is, a consumer perceives both goods as similar or comparable, so that having more of one good causes the consumer to desire less of the other good. Contrary to complementary goods and independent goods, substitute goods may replace each other in use due to changing economic conditions. An example of substitute goods is Coca-Cola and Pepsi; the interchangeable aspect of these goods is due to the similarity of the purpose they serve, i.e fulfilling customers' desire for a soft drink. These types of substitutes can be referred to as close substitutes.
(a) Tea and sugar is not correct answer. because it not suitable example of substitute
(c) Pen and ink is not correct answer. because it not suitable example of substitute
(d) Shirt & trouser is not correct answer. because it not suitable example of substitute
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