Compare the following two pairs of goods bullet coke and...

Name: compare the following two pairs of goods bullet coke and pepsi bullet skis and ski bindings a in which case are the two goods complements in which case are they substitutes b in which case do you expe
Uploaded: 2019-06-01T23:12:34-08:00
Duration: 5 min 58 s
Channel: Scott Mclean
Description: compare the following two pairs of goods bullet coke and pepsi bullet skis and ski bindings a in which case are the two goods complements in which case are they substitutes b in which case do you expe

Compare the following two pairs of goods: $\bullet$ Coke and Pepsi $\bullet$ Skis and ski bindings a. In which case are the two goods complements? In which case are they substitutes? b. In which case do you expect the indifference curves to be fairly straight? In which case do you expect the indifference curves to be very bowed? c. In which case will the consumer respond more to a change in the relative price of the two goods?

Transcript

00:01 In this question, we are looking at a couple of goods, coke and pepsi, and skis and ski bindings.

00:10 So for the first part, in a, we want to know which of these is a substitute and which is a complement.

00:22 So kind of right off the bat, we're looking at how close these two are together.

00:30 Let's see.

00:31 Man, that's difficult to draw up.

00:35 But we got there.

00:37 So for the substitutes, really you're looking at coke and pepsi as being substitutes.

00:44 As long as, you know, they're both drinks.

00:48 They're both, you know, the kind of dark brown.

00:53 They've got very similar tastes.

00:58 And in a lot of ways, i mean, for me personally, i don't really care which of these two i'm having.

01:05 They both kind of fill the same role for me.

01:10 And apparently they do for a lot of other people because you know, you show up to a place and they've got a deal with one or the other, and it's not a huge deal to the business.

01:20 They get better perks from just having that exclusive deal.

01:25 Whereas with skis and ski bindings, these are clearly complement.

01:31 You know, if you have some ski bindings and you don't have skis, you're not going downhill.

01:37 And if you have skis and you don't have ski bindings, you might be going downhill in a way that you don't really like.

01:43 You're just going to be sitting on a piece of wood and, you know, you're bound to come off of that.

01:50 It's just not going to work.

01:52 So that's part a.

01:55 In part b, we want to look at the indifference curves of these goods.

01:59 And so if i've got an option of having skis, you know, number of skis and number of ski bindings, i'm just going to abbreviate that sb.

02:15 If i am buying compliments, then really i'm not going to get a whole lot of having a whole bunch of extra ski bindings.

02:32 You know, so, you know, without extra skis...

Question

Please give Ace some feedback