1.Suppose that an individual allocates his or her entire budget between two goods, food and clothing. Can both goods be inferior? Explain.
2. Explain whether the following statements are true or false:
a. The marginal rate of substitution diminishes as an individual moves downward along the demand curve.
b. The level of utility increases as an individual moves downward along the demand curve.
c. Engel curves always slope upward.