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(a) What are the properties of indifference curves (utility functions)? (b) Use consumer theory (budget constraints...

  1. (a) What are the properties of indifference curves (utility functions)?

(b) Use consumer theory (budget constraints and indifference curves) to drive (show graphically) and explain an individual’s demand curve for a commodity (show how a change in price causes a movement along the demand curve).

(c) Use indifference curves and budget lines to show graphically and explain the expansion path for two normal goods and for a normal good and an inferior good as income changes.

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