Economics • Economic BasicsEasy
In microeconomics, what does the 'Engel Curve' illustrate?
A. The relationship between income and quantity demanded of a particular good✓ Correct Answer
B. The relationship between price and quantity supplied
C. The trade-off between inflation and unemployment
D. The combination of two goods that provide equal satisfaction
💡 Solution & Explanation
An Engel curve graphically illustrates the functional relationship between a consumer's household income and the quantity demanded of a specific good or service. Other microeconomic curves, such as supply curves, map the relationship between price and quantity supplied instead of income variations. Named after the statistician Ernst Engel, these curves help economists categorize goods as normal, inferior, or luxury.
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