When Carla made $400 each month, she bought 40 units of food at $10 per unit...
When Carla made $400 each month, she bought 40 units of food at
$10 per unit and no shelter, which
cost $20 a unit. Then she received a raise to $600 each month and
she began consuming 30 units of food
at the same price and 15 units of shelter, which still cost $20 per
unit. Sketch Carla’s income-
consumption curve for food. Also sketch her Engel curve for food
and indicate whether food is a normal
or inferior good.
Homework Answers
As income rises, consumption of F falls, so it's an inferior good, bcoz engel curve slopes downwards
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When Carla made $400 each month, she bought 40 units of food at
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