If the good indicated on the horizontal axis is a requirement good and the good marked on the vertical axis is a superior good, then draw an income consumption curve.
Draw an income consumption curve in case the good marked on the horizontal axis is a necessity good while that marked on the vertical axis is a superior good.
Share
In a graph where the horizontal axis represents a necessity good and the vertical axis a superior (or luxury) good, the income consumption curve (ICC) would typically slope upwards from left to right, illustrating how consumption patterns change with increasing income.
Necessity Good (Horizontal Axis): As income increases, the quantity of the necessity good consumed increases, but at a decreasing rate. This is because once a sufficient quantity is reached, additional income is less likely to be spent on this good.
Superior Good (Vertical Axis): For the superior good, as income increases, consumption of this good increases at an increasing rate. This is because superior goods are more desirable and consumers spend a larger proportion of their additional income on these goods.
Thus, the ICC would start from a lower left position (low consumption of both goods) and curve upwards to the right, reflecting a higher increase in consumption of the superior good compared to the necessity good with increasing income.