intermediate micro-Exam 1-Deck 3: Special Utility Cases

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5 Terms

1
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What do ICs for perfect substitutes look like?

Straight lines (constant slope).

2
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What do ICs for perfect complements look like?

L-shaped, right angles

3
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How do you solve for demand with perfect complements?

Set goods in a fixed ratio

4
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How do you find the optimal bundle with perfect substitutes?

Compare MRS with Px/Py → choose corner solution.

5
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What does a Cobb–Douglas IC look like?

Smooth, convex to origin.