Evaluate the truthfulness of the following statements.
I. The Engel curve for a normal good is upward-sloping.
II) The Engel curve for an inferior good is downward-sloping.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Question

Evaluate the truthfulness of the following statements. 
I. The Engel curve for a normal good is upward-sloping.
II) The Engel curve for an inferior good is downward-sloping.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Quizplus · Accepted Answer

The Engel curve for a normal good is upward-sloping because as income increases, the quantity demanded of the good also increases. For an inferior good, the Engel curve is downward-sloping because as income increases, the quantity demanded of the good decreases.

Evaluate the Truthfulness of the Following Statements