a) Illustrate and compare the way in which the demand schedule and budget line diagrams represent the effect of
Question
(i) an increase in the price of a good and
(ii) an increase in a consumer’s income.
b) Explain how the marginal utility theory may be used to construct a consumer’s demand curve for a product.
c) Explain the meaning of the ‘equi-marginal principle’ of consumer demand and how this concept may be used to determine the optimum combination of goods consumed.
Leave an answer