Suppose the Price of Cheese Has Recently Risen from $4

Essay

Suppose the price of cheese has recently risen from $4 to $6 per pound,while the price of fruit has fallen from $8 to $6 per pound.During this time,Miguel's income has stayed fixed at $48 per week.Before the price changes,Miguel had been buying 4 pounds of cheese and 4 pounds of fruit per week.Since the price changes,he has been buying 2 pounds of cheese and 6 pounds of fruit weekly.Assuming Miguel's preferences have not changed,is it possible to say whether the price changes have made Miguel better off or worse off? Explain.