Since 1900 real income has increased tremendously, yet the average number of children per family has decreased. Consider the following possible explanations and illustrate in terms of indifference curves and budget constraints of families between the number of children (put on the x axis) and all other goods (on the y axis). You should have three sets of indifference curves. One for each of the following scenarios.
a. Children are an inferior good; since we are richer now we want fewer of them.
b. Children are not inferior, but the cost of raising them has gone up.
c. Children are not inferior, nor are they relatively more expensive to raise, but tastes have changed. Couples want fewer children.