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You consume two goods, eggs and wine. Eggs are an ordinary inferior good. True or False:...

You consume two goods, eggs and wine. Eggs are an ordinary inferior good. True or False: If your Monday and Tuesday budget lines cross, and if the Tuesday line is steeper than the Monday line, then you will surely consume fewer eggs on Tuesday than on Monday. (The budget lines are assumed to be drawn with eggs on the horizontal axis.)

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Answer #1

Yes the given statement is true.

Eggs will be termed as inferior goods.

Inferior goods are the goods whose consumption increases with the decrease in the income of consumer and decreases with the increase in income of the consumer.

DIAGRAM SHOWING THE CHANGE IN CONSUMPTION ON TUESDAY WHEN THE BUDGET LINE GETS STEEPER THAN MONDAY

AS WE CAN SEE FROM THE ABOVE DIAGRAM THAT THE CONSUMPTION OF THE EGGS ON TUESDAY HAS REDUCED THUS MAKING A STEEPER BUDGET LINE. THIS HAS HAPPENED BEACAUSE OF THE INCREASE IN INCOME ON TUESDAY THAT ON MONDAY INDICATED BY THE STEEPER BUGDET LINE ON TUESDAY.

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