GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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On an indifference map, if the income consumption curve slopes downwards to the right it shows that
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X is an inferior good
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Y is an inferior good
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Both X and Y are superior goods
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Both X and Y are inferior goods
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Explanation:
Detailed explanation-1: -If the income-consumption curve has a negative slope, the quantity demanded decreases with income and the income elasticity of demand is negative. The good is an inferior good.
Detailed explanation-2: -Inferior Good: If the income consumption curve shows that the consumer purchases less of good X as her income rises, good X is a inferior good.
Detailed explanation-3: -IC always slopes downwards to the right, because one good increases and other decreases.
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