7. Answer the following on income effects and Engel curves. a. Define and give an example of a normal good and an inferior good (your examples do not need to be medical care related). Also, draw two separate Engel curves: one for the normal good and the other for the inferior good. Clearly identify which Engel curve belongs to which type of good. b. Assume that medical care is a normal good. Explain whether it would be possible for the Engel curve for medical care to be downward sloping at some point.

7. Answer the following on income effects and Engel curves. a. Define and give an example of a normal good and an inferior good (your examples do not need to be medical care related). Also, draw two separate Engel curves: one for the normal good and the other for the inferior good. Clearly identify which Engel curve belongs to which type of good. b. Assume that medical care is a normal good. Explain whether it would be possible for the Engel curve for medical care to be downward sloping at some point.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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