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Mike's Engel Curve with product X is  sloped downward and to the right. If Mike's preference changed...

Mike's Engel Curve with product X is  sloped downward and to the right. If Mike's preference changed and engel curve moved clockwise and other conditions remained the same, explain .... 1. what happens to the product x's demand 2. whether product y's demand curve moves leftward or rightward. please explain.

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Answer #1

1. the product x's demand : the Engel curve with product X is sloped downward to the right that means X in an inferior commodity and if engel curve has moved clockwise that means the demand for X has decreased.

2. the product Y's demand curve will move to rightward as the prefernces of Mike has changed. his demand for X has decreased than we can say that he is preferring Y over X.

*engel curve shows the relation between income level and quantity purchased of goods.

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