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Stock of durable goods on hand:
If the economy has enjoyed an extended period of prosperity, consumers may find themselves well supplied with various durable goods, e.g. cars, televisions, etc. all worth years of service. Hence, for sometime, many households will be out of the market for such products with the result that consumers will be willing to spend less and save more at each level of disposable income.
The level of disposable income:
The level of income is the basic determinant of how much households will consume.As households` income increase consumption expenditure increases and vice versa.
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using the marginal utility approach discuss how economic theory explains the optimum pattern of consumption for an individual consumer
What is the difference between MRTS & MRS?
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