a. Basic Concepts: i. utility (cardinal, ordinal, total average and marginal utilities) ii. indifference curve and budget line. b. Diminishing marginal utility and the law of demand. c. Consumer equilibrium using the indifference curve and marginal analyses. d. Effects of shift in the budget line and the indifference curve. e. Consumer surplus and its applications.
Candidates should be able to:
(i) explain the various utility concepts; (ii) apply the law of demand using the marginal utility analysis; (iii) use indifference curve and marginal analyses to determine consumer equilibrium; (iv) relate the income and substitution effects; (v) apply consumer surplus to real life situations.
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