Question: If income effect is positive for both X and Y goods, the ICC will be
Options:
Slope upward to right
Slope upward to left
Slope downward to right
Slope downward to left
✅ Explanation:
-The Income Consumption Curve (ICC) shows how the consumption of two goods changes as income increases, holding prices constant.
-A positive income effect means that as income increases, the quantity demanded for the good also increases.
-If both goods X and Y have a positive income effect, then as income increases, the consumer will buy more of both goods. This will result in an ICC that slopes upward to the right.
-The Income Consumption Curve (ICC) shows how the consumption of two goods changes as income increases, holding prices constant.
-A positive income effect means that as income increases, the quantity demanded for the good also increases.
-If both goods X and Y have a positive income effect, then as income increases, the consumer will buy more of both goods. This will result in an ICC that slopes upward to the right.