Essay
A person consumes two goods: Coke and Snickers.Use a graph to demonstrate how the consumer adjusts his optimal consumption bundle when the price of Coke decreases.Carefully label all curves and axes.What will happen to consumption if Coke is a normal good?
What will happen to consumption if Coke is an inferior good? (Remember to explain the possible change when the income effect dominates and when the substitution effect dominates).
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If Coke is a normal good, the consumptio...View Answer
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