Essay
Assume that a consumer faces the budget constraints shown.
a. Assuming that income is the same on both occasions, describe the difference in relative prices between panel a and panel b.
b. If income in panel b is 240, what is the price of good X?
c. If income in panel a is 120, what is the price of good Y?
d. Estimate the relative price of good Y in panel a and panel b.
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a. The price of good Y is relatively low...View Answer
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