Individual Demand. How Does the Best Affordable Bundle Change when the Prices or the Income Change . Optimal Consumer Choice. Assume consumer’s preferences over bundles of two goods, x and y, can be represented by a utility function U(x,y). The prices of the two goods are
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How Does the Best Affordable Bundle Change when the Prices or the Income Change
As the consumer’s income increases, the quantity demanded increases
A good is inferior if the quantity demanded falls with the consumer’s income