Question: Jones spends all his income on two goods X and
Jones spends all his income on two goods, X and Y. The prices he paid and the quantities he consumed last year are as follows: PX = 15, X = 20, PY = 25 and Y = 30. If the prices next year are PX = 6 and PY = 30, and Jones’s income is 1020, will he be better or worse off than he was in the previous year? (Assume that his tastes do not change.)
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