Draw an income consumption curve in case the good marked : I’d be happy to help you understand the concept, but I’m unable to directly draw graphs.
However, I can provide you with a description of how the income-consumption curve would look in the scenario you’ve described.
Income-Consumption Curve for a Necessity Good and a Superior Good:
In this scenario, we’re considering two types of goods: a necessity good on the horizontal axis and a superior good on the vertical axis.
- Necessity Good (Horizontal Axis): A necessity good is one that consumers continue to purchase regardless of changes in their income. As income increases, the quantity demanded of the necessity good may increase, but the increase is relatively small compared to the increase in income.
- Superior Good (Vertical Axis): A superior good is one for which the quantity demanded increases more than proportionally with an increase in income. As income rises, consumers tend to shift their preferences towards superior goods, leading to a significant increase in their consumption.
Description of the Income-Consumption Curve:
The income-consumption curve shows the various combinations of the two goods that a consumer can afford at different income levels while maintaining a constant level of utility. In this scenario, the curve would be upward-sloping from left to right, reflecting the increase in income.
- As income increases, the consumer has the ability to purchase more of both the necessity good and the superior good.
- Since the necessity good is on the horizontal axis, the increase in the quantity consumed of the necessity good as income increases will be relatively small, leading to a shallow slope for that segment of the curve.
- On the other hand, the superior good on the vertical axis will experience a larger increase in quantity consumed as income rises, resulting in a steeper slope for that segment of the curve.
In summary, the income-consumption curve would show a gradual increase in consumption of the necessity good and a more pronounced increase in consumption of the superior good as income increases.