A curve that describes the relationship between income and the amount of a good consumed (holding the consumer's preferences and all other prices fixed)is called
A) A price-consumption curve
B) The Engel curve
C) An income-consumption curve
D) A budget line

Question

Quizplus · Accepted Answer

The Engel curve plots the relationship between income and the quantity of a good consumed, assuming all other factors remain constant. The other options are not correct: a price-consumption curve shows how the quantity consumed of one good changes as the price of that good changes, holding other factors constant; an income-consumption curve shows the effect of a change in income on the consumption of both goods in a two-good model; and a budget line displays the different combinations of two goods that can be purchased with a given income and set of prices.

A Curve That Describes the Relationship Between Income and the Amount