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Austin Codrington
on Oct 14, 2024

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Suppose a consumer has strictly convex preferences and her Engel curve for a good is a vertical line for some range of income.In that same income range, her demand curve for the good slopes down.

Engel Curve

A graphic representation showing how a consumer's demand for a good varies with income, keeping other factors constant.

Strictly Convex Preferences

Preferences where consumers always prefer mixtures of goods to extremes, demonstrating a consistent desire for variety.

Demand Curve

A graphical representation in economics that shows the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at varying price levels.

  • Discern how income and price changes affect consumption bundle choices among different preferences (strictly convex, perfect substitutes, and perfect complements).
  • Illustrate the relation between Engel curves and demand curves in consumer demand theory.
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Ashley AmigonOct 14, 2024
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