ALTERNATIVE LEARNING; METHOD

A.I.M. ACADEMY PHONE NO: 9950-02747

CHAPTER 2
CON SUMER BEH AvIOUR AND DEMAND

Utilih Humar
t h e pooer or
cabaclty q a'commodihyto AaA{7"
any.
tu meaiuud in teuma uy.(imagin
the diconany meaning o witty u giuen as uesined.
Hoever to an eonorut highe ilihy does net means
T uegulners, d comhodrty ma mt be usefuL ye
t may have utiliti fr a paxlulan bdon
p e quo is Conidento be harmgel for fheal, yil
an
it' may haue a highor degr utl dos
alcoholic peuon.
Unlty vaiLa om perion to peuon
D
m o r u uiity o
0 d thiuty peono þerson dnivs
uwattn
to
n
coho
Companyion
a
beuon rEt
+hinit
#* MARGnINAL DTILITY M
t u he additonal Aaliaaclon
deied
by conuming ar

addilional unit a a. Commmodty.

*TOTAL_UTILITY
u thu dum all aginal ulililiai deriued A..
Consuming all h unu a Cornmoelity

MICROECONOMICS|
Classes by Mr NITIN YADAV PAGL NO ---
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oumulay
MUn = TUn T O n -

i MUn Change tn total utiltiy

charge in mumber aur
MUn T U n TUn-i
( i TU= MU^+ MUa + MUs -- - MUn
= 2 MU1+2*3+ --

-- . n

# |LAW OF DIMINISHIN MARGINAL UTLITY(

go on Consuming mornt and
ou
Atatis thot as we
uni a patliulo Cormmoditiy,he MU duimd ro
each adccokive unit gaus on dallirq.
Cnbss EN's FIRST AN OF CoNst'mPTiON

AssumpUons
. Conum conums tandard uit e Cornmodil
a

2. Consumslion u Corinuous.
Relaitionthib baiun TU and MU
MU

25

3 - 2 4 IT

UNOMICS| Classes by Mr. NITIN YADAV PAGE NO: 34

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Point o 8aturatio
TU
abie

Unia Abl

MU

MU

MO

MICROECONOMICS Classes by Mr. NITIN YADAV PAGE NO: 35

 ALTERNATIVE LEARNING METHODS
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1. whem 70 Hisu at dtminlsning uali MU A

oaitue.
2. whem To b Maxlimum, Mu n xeno.
. whm Tu j a l n g , MU beomes g a

|(whle umng seahom, kecp MU t

hen
l
JCONSUM ER EqUILIBRIUMC

Mea comsum sbead

It unk hu slualion du uhich a
amd
on uNasn9
a commoauly
hnulem mome
Hhumg 0 ugel hamge
ahs maximum alharlio
hat tormmooy

bb Hoaches l6 Cnsumen eguillbrium

Candlnal Ondinal

Snnglu aDublu

CovamOdly COmmodlg malyio

Cabe
Law
egua
Maugunal

CROECONOMICs Classes by Mr. NITIN YADAV PAGENO 3

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belween a d i n al and OHdmat appHDa

5La

Canduinal Appuoac Onduial Apbuoach

was
1. This ApbHoachw was .Thlo abbuoa ch
ue b clasuicals. den y Modex

Hamkea
|2. t vsed Ubiu' l |2. This appAoah
dataclion amd anu
measne satiskaclion.
plaula Ondi,hat
hy known aA

ORDINAL
3. kak kaus apjaoatl,
3. Not a seank easd

4 ase: Snge tommodih 4) lase Jndifoene

oUmd Bauai co mmoouty Cue tmaliyes

Mr. NITN YADAV PAGE NO: 37

ICROECONOMICS |
Classes by
 ALTERNATIVE LEARNING METHODS
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ACARDIOAL APPROA UH
) igke Commodi ase
1n bui caas consumn h onsumig o
(Ommmodg
omume egusloAum 6:
attainmeml
MU nodud: u wms Bl L hodu.

4On LMU7
Pau he Produ-
MU Phoduul
MU Money (MUn)

Ho MU a upte h dutine d as the erna vtilil

whm a addiional Aupee b tpnt o a
ood .

Unils Abple | M Ppu MO p MU F Piu uau

1 2 5
Mux
6 32
4 2 EP 2 2

2 2 MU
<P
2 LO 5
2 --5

1 e aboue eamupe Hhe to4ummel (onAumes5

li ae E2/uut
U apple omd Plu om apple
nd uit ea uessië uii h MU alls
KOECONOMICS Classes by Mr NITIN YADAV PAGE NO: 38
 nlTERNATIVE LRARNING: METHODS
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have assusmed that MU

Here ive a hupee to be 2
ica e an apbl is to be po unit
he Consurmen attaina eguillibrium whene As MU in
fENnA money 1.e2 u eguat to the brlee 1.e 2
Consuming 3 urita of *ppl he iu nat egutltbriuun. a

When prlee netat Cenuumer surlus zhinks ana

vice esa
eu e Ttion

MUz

MI?P nsumer (dtbuku een nhat

to nd wnhat

MU=P> chal
M <P

Unlt ple
Owsston
ien the prite the commodity Now does a
Consunex
mex
cattair eguilliBriumOR
i n h e price the Commodtty hous does a
ons umer dedes how many uncd ethat Co
V

MICROECONOMICS | Classes by Mr NITIN YADAV PAGE NO:

39 7
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2 Doude Commodty aseE

Law duballuuliem/Law o equilli briun MUl Gossen3
Ste

JaoConsuptton
Ih this Cae the conaume consumes-too comodi
Condiéron or equilibaium is
MU2 -
MU MD R Muy
CoNDITIONS
1. Ratio MU t Kice h Aame în Case bor
the gdods.
Consumpttons inewas.
2. MU4alls as

In his Case bu qt both -th g0ods are same

Pr
No P and H ane equai this means

MU of A MU B
Unia
1o 9 (2)
8
6
5)

PAGE NO 40
MROFCONOMICs | Classes by Mr NI1N YADAV
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Assumpllon 1 h t consuner has only 5

Hexe the cowmer sbends all u E5 on A *hen
he ge33 utl uwheruas he Consumes al "8' He3'
28 ils, bt in thiu manher te oould be conaumi4
one goed.
and
tberds z i on'A' and E2 on 'B' MU
so
But he
on
they by sbending 4th e 5" uber Au
Same rohm 'A' and 'B'

maximum ulit=
n such a manner
he gets
By Conduming kia.
.e =
lo+4t8+ + 41

aish hau F e8 usth puchaie

hintte înten ded to markit
OH he
good *and good y wrih ris mone.
and y þex unit *8,*The MU andd
pice o xX belouo.
schedule good x and good Y giuen
unid o qood X ard Goody
ind out hous many
should Aálish burchds e so That he oiu get
Tmaimun AatAlaiion.

MICROECONOMICS
Classes by Mr.
NiTIN YADAV TAGE. NO: AL
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PHONE NO: 9950-0274

Unta MU«
MUy Passibilhtu (xp
88 40
+2
6, 48 +8 56
36 18.3) 64+24 8 8
64 24 112
9.5)> 72 + 40
56 20
48 6
Lo 80 +56 a6)*
40 12
32 8
24

40 8

dxe both tfe good& * and y ane o ë8.

D3- = MUm
MOy
Hore S 1 MUm

Ratio MUx:MU :usith hu given

ntomi

T u fattes by Conurir 3 urit g good y and 8

unk good Y othin his glven 'inome
i.e .good Crody
CMU)

8 x8 (3X8) 88
64 T 24 =
88

MICROECONOMICS| Classes by Mr NITIN YADAV

PAGE NO: S2
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CQuiong
What rapbens when MUz MUy
P
This sifialion mblis that by sbending a nue mokL
on Good the corsumen getruter Mu then tn cae
oody. ccondingk, hestu sbend monu on'x than Y
a Conaumstion ox inorease, MUx otlal. On the
other and cHnaumption o dalls, MUy uo
as
Hie. The Consumer öill spybiing mou *
in
plau Y on when MUx M
Pr

2had tappena when MUx 2

MUY
Pa
Vice veia aboue anuwe
uestiona Kelaado Åingle Commodity Cose
4ce cHam Alu sor 20. Mehini oho iKer ice caam
has alnaody Consiumes 4. Ffe MU
Should Bhe
one
tupes 4.
Conkumes mone Ce oeam os
Ato the
Coraumbson
ing A Consumen dttains equilli b i u m when:

MU m
MU
tfene Pr 20
MUn
Ao or bing at equillibnum her MUy
4
8o ulik,

MICROECONOMIcs Classes by Mr NITIN YADAV

PAGE NO 43
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A.LM. ACADEMY

her MUn. is equal

b y Consuming hexe 4- unitt
u she hauld Ato.
MU« >8o uils she should 4vither
cor
ho
MoRe Ce- tHLams.

ORDINAL APPRoAcH (2CkSs1AN

HnaYSIS
Consumer equillibrium throuh. tndigteen
cumve appot
a ndflenunu Cwa Combinali
tis a Cusve which ehae all the posuible
toogocds that gives same {evel f dalliafaclien
the consumer, kecping to danue

Schedule
MRS Y T Z O S
Combinálion qood X
Coody jain
A

4
2

4 1:1

uROECONOMICS Classes by Mr. NITIN YADAV PAGE NO: 4 4

A..M. ACADEMY AlTERNATIVE LEARNING; METHODS
HONE NO: 9950-0274

Gpeod
X

qoDd B3
he above TC shwo3 Aame lev Aalladlien en all
h e boints [A, 8, - - - ] which a Conaumen ýh Oa Conau-
-mihg cornainationu God A and Qovd° B.

Assumtiorn sndiowce Cunse

Consuner behaves nalionally i.e he aluvaya Tru *
manimise tu áaiAatin
. The Consumen can nank us p unes on the bau
satTsiaien
uite and income 900a3 and Coniumen
qiven.
Consume pHLLLLNces ane monesbnic. Tht one
bunde u 'btten han otne in TEm d mari
- miafng AaAdalon

t+ Mondtoric_ens-
nalioral Corume aluDas
ttmeans
mote e a
that a
Commodiiy as i t oifou him a i g
per
Classes by Mr. NITIN
YADAV PAGE NO 45
MICROECONOMICS|
 ALTERNATIVE LEARNING MTHOD-

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A.IM. ACADEMY

Aatinfaolien
#Aimby mpuu t h a as consumbiom tncHRoLL $al_
ulil aluo inouas

o eCornuider 2
goods 4pioas 2 Baanas
I*Bundli » lio)
Ld Bundl (7,7)
Conume
d
pruunu
bundle 'uotU be
g Tt bundls as compared to
calbled monbtonic pnriuncs as
Toundl. Cortainu Mou bsth th gohds
OR
8undl I Bund T
Cto,) 9,7)
ogton oBundle , mO ¢on , no l of other

ropoidies Tndi enuncu Crave

nduun Cu ave aluays_Conex o ouig
Ån indi{vuna cuwe onvex. DThe ouigín betaus
odinirishing MRS MS declines Conlnu duly braue
e a ð ef diminjaking maxginai uiil 4
riauft be noted" Hhat MES irditaïa the lop
d{EuntL CIUTUe

Mi NIN YADAV
M RO ONOMIOCiasses In AG 4t
DA.I.M. ACADEMY AlTERNATIVE LEARNING; METHODS
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2ndioun Cutve slope douonuDards

t imb that as a consumen conaume moHa
good, h e muss conaume s o h e athen good:*
hatbens because he conum& deide tohaue
monè un7 o n e good (sa apptus), he aill hav
to adus e mumben ad un a ansther good (3a
banana), so hat ulily Dumains"Aame

uwhich
+ighen IC ubusentz lange bundlu goods
rhtans mota i l y becaise monaonic pnean

ooc

A 3, B(4.3)
TADAV
PAGE NO.
MICROECONOMICS Classes by Mr. N
A.L.M. ACADEMY ALTERNATIVE LEARNING MET
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TC2

Good X

Al,3) B(3,3)

IC
Udd X

A3,1) B(43)
YADAV PAGE NO: 4 8
MICROECONOMICs Classes by Mr. NITIN
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4) ndunc Cunue Twe interuuzt cach sHeL

As tuo
Indeferanu cwvu connet upruuwt vhe
Aame uwel atizda+lien, they Canna nteruo
each otheu neana , ony one tdifeunu Cund
oill pa frongk a
ghen þout r an
Indfeuna
mab. In aune Aatpfodtion o n þoint A and 4
point B ori IC oilL "be the" same. dmilarl! þeit
A and C on I also give te damu lwel atd
-adim, t mman, bai B and C should alb giethe
Aame wd q Aaiidoatien. +tourever Ai ossea
au B and C iu on diost I , IG (ne) and
TC2 uhittvely and lprut dinut lvels q
4dlMacte.Thoufore Tuo6 IC Cont trteet eth
other

TC

Apbes
MICROTCONOMICS|Clnses by Mr
NITIN YADA A NO 49
 AL.TERNATIVE LEARNING METHODS
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Why is nd un Cune conuex. td the Onigin ?.

DD

Indiewnc Cunve tab +i all hase Combinalion

tiogoools ohich'gua éaual sáai
hete Cuns auL Conuex to the Onigin as hy ae

baded uban diminishing Maxginal "rá _

dubiliiiWen
MRS means the Ht o uballuiien one good
os anoher, t ii because Consumers þiufruns o
one good duch hat he u wlling to gun u
Aome amount e one good. for the etid amous
o another good o r t s a arnou e anbher g o
Stthout e l i n hu -total utilty

CsDd B_ YAlDAY
PAGENO S0
NTTIN
ICROECONOMICS Ciasses by Mr.
 A.I M. ACADEMY Al.TKRNATIVE LEANINC: METHOUN
PHONE NO: 9950-02747

MRS hone - AGood A. Lo

4 Gqoad B Lýain |

+u C
aoiSastihauu
C
Combinahen

Gdx

ad

umes two
be posible ai corilarf Con sumerCons
Can'
une
0ods at " a
B on dallin
usiTh
e y încrease
itne MU gcod goes wll be wlling to
Cohsumer
in unly6 B theoa gr obtaining rorr

u gabol A
Aacnetce
Gppod B

PA
Mr NiTIN YADA
MICROECONOMICslasses h
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# Budgst lLine Biu LUne

t s the gvaphi cal pruurtalien d all the tundles uwhleh
a Coruuercan cConsume oth Dhu inome that u
given and a ptvailing mankt brit2g

Alope Budac Jina - MRE

L trn nuypa
OR
uanlity Lgood Lost MRE
Duanlly o good O.gainad (Marret rte
i n teMMA u n u ezchangt

Gyood A

Gjood B
M
q ualione Budac lne =
R+ b7=
uShene P, = "heiu of good A
P-huls
K =
Duartty good A

YADAV PAGE NO 2
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 ALTERNATIVE LEARNING METHODS
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toM C Nou0 auning that ncome the Conaurne

V and
Good A Flo drd gocd B u ao*
Run P4 + 2 M
loxo t loxy= 40
loxL + 1Ox3 40
OX2 lox2 = 40
lOx3 + loxI 40
1Ox4 + 1oxo 40o
Ao Combinaliena ane
Co,4), (4,3), (2,2), (3,1), (+o)
Yroporiiu Budit line
Budgat Jini u doonudand sloppirg becaus e the
Coname Can bus mone of one goodl by looting the
Cihe as t h incoma ov
budgit u coritat
.

Budgt inu changu pollen only:

Ees other o th 9bod changt.
ofudgi" in cmaii or daouai.

At allhe burndlu Tht "*ne condume.

uwth his ome at
Can by
puvaiin Tarki i

MICROECONOMICS| Classes by Mr NTTIN YADAV

PAGE NO. 53
 LEARNING: METHODS
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t
Oieunu bzDeon budgut linu on Budgt
Budaat &et Budat ine

t includu all +he bowl #apruui all Thoe

bundlea which 4st cost Ls burndlis that tfe canunme
tPhan o equal to Conauma Piu bunchase
Can 'erL by sndir
monu inierni at guen incom at thi
piu (Budaat caftrairt en i c .
The Bundu budgit ait lia The bundlu tha budgst
ther on or balo 4Ra ne Ae only on thu
budgat ine-bit entj n hebudget line

Diogham

Cy ood B

ntorne thL tondumer tnoea1e

Both tRegoodu beome chuaben
MICH
OECONOMICS | Classes by Mr NITIN YADAV PAGE NO 54
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PHONE NO: 99530-02747

then Good B beoms Cxpensive

A
qood (Roahion)

Good 8

hen A becone chuabetn.

yood (Rotnhien)

qoed B

Changs in prite aqoodA

and Good B.
tha
muct ave. a p i m ed
wot nuu Only
b u d s e lim uma

)lssus
Classes hy Mr
NTIN
YADAV
PAG NO: S2
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CON SUMER EQDILIBRIDM

.Conswmen attain equillibium at tu baist chee
Budgir ine u tangert to indituni Cunve.

MR Og MRS MRE

Ape ndenes amve = Alope ebudat lin

MRS> MRE MRS

MRS MR E
6MeS
LMes MRE
-Ts B
Tu
N

In e above diagam MN Habrulurt budga linL ard

TCt IC2 , TC °sabrt dierurit e bundi
Bhousing Ait o satiaalerna ohexe Tes> I
ttomeTcs u + Righest aatieadien buit 6t usdhi
Te the conumen.
udait e
Wherus IL and IC2 ave ustRin the budgat Ica >1C,
o budget lin mak a sangest

ICROECONOMICS | Casses by Mr NTTIN YADAV PAGE NO: 56

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P H O N E NO: 9 9 5 3 0 - 0 2 7 4 7

CONIDUTI DNS UR ConsumER E&oiLBRIUM

budaet ins shsuld be kaygent h Hu Tc. irc RS
&ual to the laio o puus et two gods (MRE)
J ahuld be conme o he ogn ie NRS Bsuld
be dimnuhing at point eqülbainM
Two Cades.
ohen MRS MRE
wn a CPnaunw stasconaumug gsOdX *Gooo ,
on
ho willing neas to saerifu g8od y or Good* kesps
diminuhing but guater dhan Hhe daac ARgurd
to fals bur
h maike (nRe) . A hu MRS tends
by
MKE Anuans nstanb, at togenuy lel NRS- MRE

en MRS MRE
an hs buatm,ko oMEuma wllng to s a u i u
Reas than k o t nauket wans a par prväiling piea
do ho Cast uvuld not be poaáikls and He conoumt
woulo g bauk fo qh kangenb { d .

wnat would be s effeut equiühaium wtuen

m

budget une shfH Aotntrs 9

Conaumil Cenaums bny gonele *Y. tu

nLeni 3 0 and o
mou
pu ge0as X
y a
d l
aand
naure fotlmuung uiatoY:
o) Can r cenaumii ahond a bundle Y*
ESY. plan
b) at w l b he MKSny n coneie
n u l u bluwm txplaunu.

MiCROECONOMICSClasses by Mr NITIN YADAV

PAGE NO 57