2015 · Q79
When two goods are completely interchangeable, they are
General KnowledgeIndian Economy
- APerfect substitutes
- BPerfect complements
- CGiffen goods
- DVeblen goods
Explanation
Two goods that are completely interchangeable in consumption (e.g., two identical brands of salt) are perfect substitutes, with infinite cross-elasticity of demand. Perfect complements are consumed together, while Giffen and Veblen goods are exceptions to the law of demand. The answer is A.