Last semester, I was introduced to Engel’s Law. In my quantitative methods subject, some students asked about deriving the relationship from income earned and food expenditure for a sample of households. While once regarded as a useful and interesting economic theory, it is now also a cause for worry.
Practically every first-year Commerce student is introduced to Microeconomics through the all-important assumption of rational decision-makers: a “rational” person makes a decision by comparing the marginal benefit of an action against the marginal cost it incurs. The economy as visualised in the textbooks is made up of all these rational