2. Constructing an indifference curve a Pears Oranges Pears 30 24 20 14 10 8 6 Oranges 6 7 8 10 13 15 20 Point a b c d e f g

4. More of a commodity is better than less

5. Preference of a consumer are transitive

8. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7

9. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7  Y = 4  X = 1 MRS = 4

10. Deriving the marginal rate of substitution ( MRS ) a b Units of good Y Units of good X 26 6 7 c d  Y = 4  X = 1  Y = 1  X = 1 MRS = 1 MRS = 4 13 14 9

14. DMRS

15. An indifference map Units of good Y Units of good X I 1 I 2 I 3 I 4 I 5

19. A budget line Units of good Y Units of good X a b Units of good X 0 5 10 15 Units of good Y 30 20 10 0 Point on budget line a b Assumptions P X = £2 P Y = £1 Budget = £30

20. Effect of an increase in income on the budget line Units of good Y Units of good X Assumptions P X = £2 P Y = £1 Budget = £40 16 7 m n Budget = £40 Budget = £30

21. Effect on the budget line of a fall in the price of good X Units of good Y Units of good X Assumptions P X = £1 P Y = £1 Budget = £30 B 1 B 2 a b c

24. Consumer Equilibrium

25. The Best Affordable Bundle

26. Finding the optimum consumption I 1 I 2 I 3 I 4 I 5 Units of good Y O Units of good X Budget line

27. indifference curve and budget line I 1 I 2 I 3 I 4 I 5 Units of good Y O Units of good X r s t Y 1 X 1 v u

28. Units of good Y O Units of good X B 1 Effect on consumption of a change in income I 1

29. I 2 Units of good Y O Units of good X B 1 B 2 I 1 Effect on consumption of a change in income

30. I 2 Units of good Y O Units of good X B 1 B 2 B 3 B 4 I 1 I 3 I 4 Effect on consumption of a change in income

31. I 2 Units of good Y O Units of good X B 1 B 2 B 3 B 4 I 1 I 3 I 4 Income–consumption curve Effect on consumption of a change in income

32. Utility Maximization