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

Engel curve describes the relationship between income and the amount of a good consumed (holding the consumer's preferences and all other prices fixed), whereas a price-consumption curve shows the effects of a change in the price of a good on the quantity demanded of that good. An income-consumption curve shows the different combinations of two goods a consumer can afford at different income levels, and a budget line shows the different combinations of goods a consumer can afford given their income and the prices of the goods. Therefore, the best choice is B, the Engel curve.

A Curve That Describes the Relationship Between Income and the Amount