1. **Problem Statement:** Draw indifference curve diagrams showing the income consumption curve (ICC) for three cases: (i) Both X and Y are normal goods. (ii) Good X is normal and good Y is inferior. (iii) Good X is inferior and good Y is normal. 2. **Key Concepts:** - An indifference curve shows combinations of goods X and Y giving the same utility. - The income consumption curve (ICC) traces optimal bundles as income changes, holding prices constant. - Normal goods: demand increases as income increases. - Inferior goods: demand decreases as income increases. 3. **Case (i): Both X and Y are normal goods** - As income rises, consumption of both X and Y increases. - ICC slopes upward, moving to higher indifference curves. - Diagram: Indifference curves convex to origin, ICC moves outward and to the right. 4. **Case (ii): X normal, Y inferior** - As income rises, demand for X increases, demand for Y decreases. - ICC moves rightward (more X) but downward (less Y). - Diagram: ICC slopes downward in Y direction but rightward in X. 5. **Case (iii): X inferior, Y normal** - As income rises, demand for X decreases, demand for Y increases. - ICC moves leftward (less X) and upward (more Y). - Diagram: ICC slopes upward in Y but leftward in X. 6. **Summary:** - ICC shows how consumption bundles change with income. - Normal goods cause ICC to move in the same direction as income. - Inferior goods cause ICC to move opposite to income for that good. Final answer: Diagrams would show ICC moving outward and right for (i), right and down for (ii), left and up for (iii).