Theory of Consumer Behaviour

Suppose the market price of a normal commodity increases. The substitution effect causes a consumer to purchase $5$ fewer units of the commodity. If the total price effect results in an overall reduction of $9$ units in quantity demanded, what is the specific impact of the income effect on the quantity demanded of the commodity?

When the price of an inferior good decreases, the resulting income effect reinforces the substitution effect, causing a larger total increase in quantity demanded than would occur for a normal good.

A student in Lagos is willing to pay a maximum of \text{\mathbb{N}}2,500 for a transit pass, but the prevailing market price is \text{\mathbb{N}}1,600. What is the consumer surplus derived by the student from purchasing the pass?

A consumer allocates a monthly budget of ₦24,000 between Good $X$ (plotted on the horizontal axis) and Good $Y$ (plotted on the vertical axis). The initial price of Good $X$ ($P_X$) is ₦1,200 per unit and the price of Good $Y$ ($P_Y$) is ₦800 per unit. If the price of Good $Y$ increases by $50\%$ while the consumer's income and the price of Good $X$ remain unchanged, what is the absolute slope of the new budget line?

A consumer's inverse demand function for bags of fertilizer in an agricultural zone is given by the equation $P = 200 - 10Q$, where $P$ is the price per bag in Naira ($\text{₦}$) and $Q$ is the quantity of bags demanded. If the prevailing market price of fertilizer is $\text{₦}80$ per bag, what is the consumer surplus in Naira ($\text{₦}$)?

A rational consumer allocates income between Good $X$ and Good $Y$, priced at $\text{₦}400$ and $\text{₦}100$ per unit respectively. If the consumer chooses a bundle on their budget line where the marginal rate of substitution of $X$ for $Y$ ($MRS_{xy}$) equals $4$, which condition must also hold to guarantee that this point of tangency achieves maximum satisfaction?

A consumer derives a total utility of $85$ utils from consuming $5$ plates of rice. If the marginal utility derived from the $6^{\text{th}}$ plate is $7$ utils and the marginal utility from the $7^{\text{th}}$ plate is $3$ utils, what is the total utility derived from consuming $7$ plates of rice?

Under cardinal utility analysis, at what point does a rational consumer attain equilibrium when consuming a single commodity?

The table below shows the total utility ($TU$) and marginal utility ($MU$) derived by a consumer from consuming successive slices of meat pie:

What is the value of $X$, representing the marginal utility derived from the $4^{\text{th}}$ slice of meat pie?

A consumer obtains a total utility ($TU$) of $18$ utils, $32$ utils, $42$ utils, $48$ utils, and $50$ utils from consuming $1$, $2$, $3$, $4$, and $5$ cups of coffee, respectively. What is the marginal utility ($MU$) derived from consuming the $4^{\text{th}}$ cup of coffee?

The table below presents the Total Utility ($TU$) obtained by a consumer from consuming successive bottles of sparkling water:

Based on the table above, at which unit of consumption does the consumer reach the point of satiety?

According to cardinal utility theory, a rational consumer consuming a single commodity reaches equilibrium when the marginal utility derived from that commodity is equal to its what?

A consumer allocates a fixed budget between Good $X$ and Good $Y$. Good $X$ sells for $\mathbb{N}40$ per unit, while Good $Y$ sells for $\mathbb{N}15$ per unit. If the consumer obtains $160$ utils of marginal utility from the last unit of Good $X$, what marginal utility must Good $Y$ yield for the consumer to attain equilibrium?