Consider two consumers, A and B, and consumer A' Engel curve is positively sloping while consumer...

 

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Consider two consumers, A and B, and consumer A' Engel curve is positively sloping while consumer B's Engel curve is backward bending (concave down). What do they indicate to you about their consumer behaviors for the consumptions of good x? (a) Consumer A sees good x as a normal good while consumer B sees good x as, initially a substitute for good x and then sees good x as a complement. (b) Consumer A sees good x as a normal good while consumer B sees good x as, initially, a normal good but then as that consumer's disposable income rises, consumer B sees good x as an inferior good. (c) Consumer A sees good x as a normal good while consumer B sees good x as a substitute for another good but then after consumer B's income rises, consumer B sees good x as perfectly price elastic. (d) None of the above. Consider two consumers, A and B, and consumer A' Engel curve is positively sloping while consumer B's Engel curve is backward bending (concave down). What do they indicate to you about their consumer behaviors for the consumptions of good x? (a) Consumer A sees good x as a normal good while consumer B sees good x as, initially a substitute for good x and then sees good x as a complement. (b) Consumer A sees good x as a normal good while consumer B sees good x as, initially, a normal good but then as that consumer's disposable income rises, consumer B sees good x as an inferior good. (c) Consumer A sees good x as a normal good while consumer B sees good x as a substitute for another good but then after consumer B's income rises, consumer B sees good x as perfectly price elastic. (d) None of the above.

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