Question

    Expansion path is related to production theory similarly

    ________________ is related to consumption theory
    A Engel curve Correct Answer Incorrect Answer
    B Price consumption curve Correct Answer Incorrect Answer
    C Income consumption curve Correct Answer Incorrect Answer
    D Contact curve Correct Answer Incorrect Answer

    Solution

    In economics and particularly in consumer choice theory, the income-consumption curve is a curve in a graph in which the quantities of two goods are plotted on the two axes; the curve is the locus of points showing the consumption bundles chosen at each of various levels of income. Similarly, expansion path is a curve in a graph with quantities of two inputs, typically physical capital and labor, plotted on the axes. The path connects optimal input combinations as the scale of production expands.

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