MGEB02H3 Chapter 4: Chapter 4
29 Oct 2011
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Chapter 4 individual and market demand 11-10-28 9:21 pm. It can either decrease or increase because the decrease/increase in the price of food has increased/decreased the consumer"s ability to purchase both goods: movement along the demand curve (point by point) Mrs varies along the individual"s demand curve tells us something about how the consumers value the consumption of a good or service. Income-consumption curve curve tracing the utility- maximizing combinations of two goods as a consumer"s income changes (price held. Fixed!: shift in the demand curve itself (increase in income, shift right) Normal goods (consumption rises as income rises): income consumption curve has a positive slope qd increases with income, income elasticity of demand is positive, greater shifts to the right, greater the income elasticity. Inferior goods (consumption falls as income rises): qd falls as income increases, the income elasticity is negative.
