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Engel Curves

engel - essentially just demand curves, except w/ respect to income  

  • axes changes to income and just 1 good
  • normal good - increased income >> increased consumption
  • inferior good - increased income >> decreased consumption
  • take demand curve C = (4/5) (I/PC) for instance
    • C changes w/ I >> linear relationship
    • I is independent variable, C is dependent
    • engel curve would be linear line

   

  • income consumption curve for an inferior good
  • consumption of good 1 decreases w/ increasing income by the 3rd budget line >> good 1 is an inferior good
  • consumption of good 2 increases w/ increasing income >> normal good
Subject: 
Economics [1]
Subject X2: 
Economics [1]

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