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Microeconomics for business 1. This question is designed to test your knowledge of Hicks - Allen indifference curve analysis (ICA) a) Using separate appropriate diagrams in each case show the effect on consumer's equilibrium in the following circumstances. Begin from the following: the consumer has an income of £100; they face two products, fish and beans, which cost £5 and £3 respectively. They prefer fish (you decide by how much). Consumers spending budget (£) Income : £100 Price of good Y (fish) £5 each Price of good X (beans) £3 each i) Their income goes up by 10%. Assume both fish and beans are normal The consumer's income has increased by 10%, thus increasing their income from £100 to £110; this has increased their disposable income and spending power. The consumers spending budget is represented by the budget line (or budget constraint). It gives the budget constraint for the individual's current level of income. The consumer's preference is represented...

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