(a)[12]
Compare how a demand curve for a product is derived using the marginal utility theory with how it is derived using indifference curve theory.
(b)[13]
Discuss whether the existence of (i) inferior goods and (ii) advertising undermines the basic assumptions of those demand theories.
- Discuss whether the existence of inferior goods undermines the basic assumptions of those demand theories. [6]
- Discuss whether the existence of advertising undermines the basic assumptions of those demand theories. [7]