Suppose a consumer's utility is a function of two goods and , and is given by the function . The consumer's Engel curve is
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2 marks, −1MicroeconomicsDemand theory and elasticityIncome elasticity, normal and inferior goods and Engel curvesEasyabout 1 min
JNU SIS 2017 Question 21: Demand theory and elasticity
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Suppose a consumer's utility is a function of two goods x and y, and is given by the function U(x, y) = xy. The consumer's Engel curve is (A) linear (B) non-linear (C) downward sloping (D) None of the above
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.
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