For perfect complements, the (uncompensated) demand curve slopes down and the compensated demand (or MWTP) curve is perfectly vertical.

Answer the following statement true (T) or false (F)


True

Rationale: There are no substitution effects --- which implies compensated demand curves (that only incorporate substitution effects) must be vertical. Perfect complements are also normal goods (at least in the 2-good model) -- thus the uncompensated demand curve slopes down.

Economics

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