When deriving an Engel curve,the prices of both goods
A) are held constant.
B) increase by the same percentage as income.
C) decrease by the same percentage as income.
D) can either decrease, increase or stay the same.

Question

Quizplus · Accepted Answer

When deriving an Engel curve, the prices of both goods are held constant. The focus is solely on the relationship between income and the quantity demanded of one good while holding the price of the other good constant. Therefore, option A is the best choice.

When Deriving an Engel Curve,the Prices of Both Goods