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JAMB Economics 1986 Question 12

Question 12

Theory of Demand

What fundamentally determines how much a consumer spends in a producer's shop?

  1. A.Individual's propensity to consume
  2. B.Level of his taxation
  3. C.Level of his income
  4. D.Individual's taste or fashion.
Show the answer and explanation

Answer: C (Level of his income)

Explanation

How much a consumer can spend depends first of all on his income; the other factors work within that limit.