Engel curves show the relationship between income and the quantity demanded of a good. For normal goods, as income increases, the quantity demanded also increases, resulting in an upward-sloping curve. For inferior goods, as income increases, the quantity demanded decreases, resulting in a downward-sloping curve.

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An Engel Curve

Question 15

Multiple Choice

An Engel curve:

A) slopes upward for normal goods and downward for inferior goods.
B) slopes upward for inferior goods and downward for normal goods.
C) slopes upward for both normal and inferior goods.
D) slopes downward for both normal and inferior goods.

Correct Answer: