📚 Learning Guide
Substitutes and Complements in Economics
medium

Which of the following pairs of goods are most likely to be considered substitutes in the context of consumer choice?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

Butter and Margarine

B

Tea and Coffee

C

Shoes and Socks

D

Gasoline and Public Transport

Understanding the Answer

Let's break down why this is correct

Answer

Substitutes are goods that can replace each other when prices change or when a consumer's preferences shift. For example, if the price of coffee goes up, many people might choose to buy tea instead, as both drinks serve a similar purpose. This means coffee and tea are substitutes because they satisfy the same need for a warm beverage. When consumers see a price increase in one good, they often look for a similar option that is cheaper, leading to a switch in their purchasing choices. Understanding substitutes helps businesses and economists predict how changes in price can affect consumer behavior.

Detailed Explanation

Tea and coffee are substitutes. Other options are incorrect because Some might think these are substitutes because they can both spread on bread; People might confuse these as substitutes since they are worn together.

Key Concepts

substitute goods
goods classification
Topic

Substitutes and Complements in Economics

Difficulty

medium level question

Cognitive Level

understand

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