7.
The graph to the right gives two indifference curves and two budget constraints for a single individual. Due to a loss in income the individual moves from indifference curve
U
1
to
U
0
. From this we know that:
X is an inferior good.
X is a normal good.
X is a luxury good.
Y is an inferior good.
Y is a price elastic good.
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7. The graph to the right gives two indifference curves and two budget constraints for a single individual. Due to a loss in income the individual moves from indifference curve U1 to U0. From this we know that:
