A consumer is in equilibrium at point A in the accompanying figure. The price of good X is $5.
a. What is the price of good Y?
b. What is the consumer’s income?
c. At point A, how many units of good X does the consumer purchase?

d. Suppose the budget line changes so that the consumer achieves a new equilibrium at point B. What change in the economic environment led to this new equilibrium? Is the consumer better off or worse off as a result of the pricechange?

  • CreatedNovember 15, 2011
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