If the income-consumption path slopes upward,then:
A) both goods are normal goods.
B) both goods are inferior goods.
C) the goods are substitutes.
D) the goods are complements.

Question

Quizplus · Accepted Answer

If the income-consumption path slopes upwards, it means that an increase in income leads to an increase in consumption of both goods. This behavior is typical of normal goods, which are goods for which demand increases as income increases. Inferior goods, on the other hand, are goods for which demand decreases as income increases. Substitutes and complements refer to the relationship between two goods, not their reaction to changes in income. Therefore, the correct answer is A) both goods are normal goods.

If the Income-Consumption Path Slopes Upward,then