2007 DSE

[Bhaskar Biswas]

in Q2.
with quantity of x on the horizontal axis, the engel curve for commodity x for u=y=g(x) is given by
a) a ray through the origin
b) a vertical line
c) a horizontal line
d) a curve with an inflexion point

[nidhi]

The angel curve will be vertical because demand of 'x' will not increase with increase in income.

[Bhaskar Biswas]

The utility function is given as u=y+g(x)

[ranajoy gn]

hi bhaskar,how are you?
you may revise "quasi-linear preference" and see why the income effect is zero. you may refer -varian.i think nidhi realised your typing error ,because i got the same answer -b).