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Questions › IIT JAM › IIT JAM 2026 › Q45
1 markMicroeconomics › Demand theory and elasticity › Income elasticity, normal and inferior goods and Engel curvesModerateabout 2 min

IIT JAM 2026 Question 45: Demand theory and elasticity

The utility function of a consumer in a two-good world is u(x1,x2)=minimum{x1,x2}u(x_1,x_2)=\text{minimum}\{x_1,x_2\}u(x1​,x2​)=minimum{x1​,x2​}, where x1x_1x1​ and x2x_2x2​ are quantities of goods X1X_1X1​ and X2X_2X2​. The market prices of X1X_1X1​ and X2X_2X2​ are Rupee 1 and Rupees 2 per unit. Assuming income is measured on the vertical axis, the slope of the Engel curve for X2X_2X2​ is ________ (in integer).

Answer and worked solution

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Plain-text version

The utility function of a consumer in a two-good world is u(x₁,x₂)=minimum{x₁,x₂}, where x₁ and x₂ are quantities of goods X₁ and X₂. The market prices of X₁ and X₂ are Rupee 1 and Rupees 2 per unit. Assuming income is measured on the vertical axis, the slope of the Engel curve for X₂ is (*in integer*).

Also written as: The utility function of a consumer in a two-good world is u(x_1,x_2)=minimum{x_1,x_2}, where x_1 and x_2 are quantities of goods X_1 and X_2. The market prices of X_1 and X_2 are Rupee 1 and Rupees 2 per unit. Assuming income is measured on the vertical axis, the slope of the Engel curve for X_2 is (*in integer*).

Demand theory and elasticity has come up 161 times in 7 exams since 2004.

What this question tests

This question is on Income elasticity, normal and inferior goods and Engel curves, part of Demand theory and elasticity in Microeconomics.

How demand responds to income, how goods are classified by that response, and Engel's law.

TestStop has 33 past-paper questions on this subtopic; the nearest in year are below.

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