Question : Assertion: The Engel curve represents the relationship between the quantity demanded of a good and the consumer's income.
Reason: Engel curves can be used to distinguish between normal goods, inferior goods, and luxury goods.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct option is (a) Option A Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion states that the Engel curve represents the relationship between the quantity demanded of a good and the consumer's income, which is true. The Engel curve shows how the quantity demanded of a good changes as the consumer's income changes.
The reason provided in the assertion is also true because Engel curves can indeed be used to distinguish between different types of goods. They can help identify normal goods, where the quantity demanded increases as income increases, inferior goods, where the quantity demanded decreases as income increases, and luxury goods, where the quantity demanded increases at a proportionately higher rate than income.
