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Income consumption curve

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Reference no: EM131233075

Microsoft Word - Problem Set 3 (Questions)

  1. For each of the following, sketch a curve with the appropriate shape given the assumptions:
    1. An Engel curve for x, where preferences for x and y take a Cobb-Douglas form.
    2. An Income Consumption Curve (ICC), if both x and y are normal at lower levels of income, whilst at higher income levels, y is inferior.
    3. A Price Consumption Curve (PCC) for y, where the demand for y is perfectly price-inelastic.

Reference no: EM131233075

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