Which of the following exemplifies a pair of substitute goods?

• A. Coffee and sugar
• B. Butter and margarine
• C. Printers and ink cartridges
• D. Shoes and shoelaces

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of substitute goods. Substitute goods are products that can replace each other in consumption, meaning if the price of one increases, the demand for the other tends to increase as consumers switch to the alternative.
2. Step 2: Analyze each pair to determine if they are substitutes or complements. Complementary goods are used together, so an increase in the price of one decreases the demand for the other.
3. Step 3: Consider 'Coffee and sugar' — these are typically complements because sugar is often used with coffee, so they are not substitutes.
4. Step 4: Consider 'Butter and margarine' — these are classic substitutes because they serve similar purposes (e.g., as spreads or in cooking), so if the price of butter rises, consumers may buy more margarine instead.
5. Step 5: Consider 'Printers and ink cartridges' and 'Shoes and shoelaces' — these are complements because printers require ink cartridges, and shoes require shoelaces; they are not substitutes.