Question 6[10]

6.1.Define the following:

6.1.1.The indifference curve(1)

6.1.2.The budget line(1)

6.2.With reference to the indifference theory with good Y on the vertical axis and good X on the horizontal axis, graphically illustrate a change in consumer equilibrium due to a change in income. Suppose that income has increased. (6)

6.3.Explain what the negative slope of the indifference curve implies.(2)