Read the following passage and answer, question.

A consumer is a rational individual who knows, what is good and bad for him/her. So he always tries to achieve the best to get maximum satisfaction. Thus, the consumer chooses the set of bundles as per his preference which is best for him. The consumer always prefers to move to a point on the highest possible indifference curve given on the budget set. The slope of the budget line is the rate at which the consumer is able to substitute one good for the other in the market.

Which is an example of substitute good?

Tea and Coffee

The answer is Option 3: Tea and Coffee.

Substitute goods are goods that can be used in place of each other to satisfy the same need. In other words, consumers can substitute one good for the other without significantly affecting their level of satisfaction. Tea and coffee are substitute goods because they both satisfy the need for caffeine. A consumer can drink one or the other to get their caffeine fix.

• Pen and ink are not substitute goods because they are both necessary for writing. A consumer cannot use one without the other.

• Car and petrol are not substitute goods because a car cannot run without petrol.

• Shoes and socks are not substitute goods because they are both necessary for wearing shoes. A consumer cannot wear shoes without socks.