Draw a budget constraint and indifference curves for pizza and Pepsi. Show what happens to the budget
Question:
Draw a budget constraint and indifference curves for pizza and Pepsi. Show what happens to the budget constraint and the consumer’s optimum when the price of pizza rises. In your diagram, decompose the change into an income effect and a substitution effect.
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Figure shows the budget constraint BC 1 and two indifference curves The consumer ...View the full answer
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