Author Question: If the Engel curve for a good is upward sloping, the demand curve for that good must be downward ... (Read 103 times)

jayhills49 · **on:** Jul 1, 2018

If the Engel curve for a good is upward sloping, the demand curve for that good must be downward sloping.

Indicate whether the statement is true or false

Question 2

A good may be inferior at some income levels and normal at others.

Indicate whether the statement is true or false

Rilsmarie951 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

True . If the Engel curve is upward sloping, the good is normal. As a result, the income effect will reinforce the substitution effect and guarantee a downward-sloping demand curve.

Answer to Question 2

True . A consumer may demand more of the good at low income levels and less of the good at higher income levels. Hamburger or macaroni and cheese dinners may be examples of such goods.