Answer to Question #272911 in Microeconomics for Saranga

Question

Describe how the Income Consumption Curve and the Engel Curve are related.

Answer 1

Each point of an Engel curve corresponds to the relevant a point of income consumption curve. Thus R’ of the Engel curve EC corresponds to point R on the ICC curve. Engel curve for normal goods is upward sloping which shows that as income increases, consumer buys more of a commodity.