Consumer theory attempts to provide an economic model that can explain how the demand for a good will be affected by variables such as its price, consumers’ incomes, and the prices of other goods. This chapter analyses more fully some basic principles of demand theory which were presented in Chapter 1. The model of consumer behaviour developed can also be applied to other aspects of individual decision making, such as the labour supply decision.
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- 3.See C. Joll, C. McKenna, R. McNabb and J. Shorey, Developments in Labour Market Analysis (London: George Allen & Unwin, 1983).Google Scholar