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Steaks and steak knives are a good example of:

a. substitutes.
b. luxury goods.
c. inferior goods.
d. complements.

1 Answer

4 votes

Final answer:

Steaks and steak knives are a good example of complements because they are goods that are often used together, enhancing each other's consumption. This relationship fits the economic definition of complements better than substitutes, luxury goods, or inferior goods.

Step-by-step explanation:

Steaks and steak knives are a good example of complements. In economics, complements are goods that are often used together so that consumption of one good tends to enhance consumption of the other. This is precisely the relationship between steaks and steak knives; the purchase and use of steaks tend to increase the value or utility of steak knives, and vice versa. Applying the principle of ceteris paribus, other things being equal, when the consumption or demand for steaks increases, it typically leads to an increased demand for steak knives as they are used in tandem.

Furthermore, the concept of complements is different from substitutes (goods used in place of one another), luxury goods (goods whose demand increases more than proportionally as income rises), and inferior goods (goods whose demand declines as income rises). Therefore, in the context of the provided choices, the correct answer to the student's question is d. complements.

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