Question

Goods or services that are similar to one another from the consumer's perspective are known as

a	unrelated goods.

b	complements.

c	equal goods.

d	simulated goods.

e	substitutes.

Which pair is an example of substitute goods?

a	Insecticide and umbrellas

b	Computers and monitors

c	Tennis balls and baseball bats

d	Coffee and sugar substitute

e	Coke and Pepsi

Complements are goods or services that

a	consumers use together in some way.

b	are similar to one another from the consumer's perspective.

c	compete with each other in the marketplace.

d	are never used together.

e	build up the user's self-esteem.

Answer 1

Goods or services that are similar to one another from the consumer's perspective are known as Equal goods. Because equal goods are those goods which can be same in quantity, size or value. Hence, option(c) is correct.

Example of substitute goods is Coke and pepsi. Because substitute goods are those which can be replace or substitute by each other. These are the goods which gives benefits or same satisfaction. As coke and pepsi both are drinks and black in colour , therefore substuting coke with pepsi or pepsi with coke doesn't reduce the consumer benefits. If price of one good increases , then demand for other good (i.e substitute) increases. Hence, option(e) is correct.

Complements are goods or services that consumers use together in some way . Because complements are goods which are consume together . For example: Car and petrol. Without petrol , there is no use of car. Therefore, they both are consume together. As price of petrol rises, demand for cars decreases. Hence, option(a) is correct.