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13 Feb 2018
22. [Consumer Theory] Ada, who has income M = $4,800 and utility U = XY pays Px = $20 and Py = $40. a) Provide a fully labelled indifference curve diagram (Good X on the horizontal axis) and supplemental calculations to illustrate the income and substitution ef- fects associated with the introduction of a $30 per unit subsidy on Good Y. Cal- culate bundle "b". Making reference to your diagram, explain how you can infer that Ada thinks that Good Y is a normal good. b) Make
22. [Consumer Theory] Ada, who has income M = $4,800 and utility U = XY pays Px = $20 and Py = $40. a) Provide a fully labelled indifference curve diagram (Good X on the horizontal axis) and supplemental calculations to illustrate the income and substitution ef- fects associated with the introduction of a $30 per unit subsidy on Good Y. Cal- culate bundle "b". Making reference to your diagram, explain how you can infer that Ada thinks that Good Y is a normal good. b) Make
glorysoft2Lv10
2 Oct 2022
Hubert KochLv2
15 Feb 2018
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