Question

At current prices, housing costs $50 per unit and the composite good has a price of 1 per unit. A wealthy benefactor has given Joe, a penniless person, 1 unit of housing and 50 units of the composite good. Now the price of housing falls by half. True or false: Joe is better off as a result of the price change. Explain.



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  • CreatedDecember 12, 2014
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