The Engel curve for a Giffen good is. negatively sloped positively sloped vertical horizontal
Question
The Engel curve for a Giffen good is. negatively sloped positively sloped vertical horizontal
Solution
The Engel curve for a Giffen good is negatively sloped.
Here's why:
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A Giffen good is a type of inferior good. Inferior goods are those for which demand decreases as income increases.
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The Engel curve describes how a consumer's demand for a good changes as their income changes.
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For most goods, as income increases, demand also increases, so the Engel curve is positively sloped.
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However, for a Giffen good, as income increases, demand decreases. This means the Engel curve for a Giffen good is negatively sloped.
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This negative slope represents the unique behavior of Giffen goods, where an increase in price actually leads to an increase in quantity demanded, contrary to the law of demand.
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