Question: When the price of gasoline is 1 gal you consume 1000
When the price of gasoline is $1/gal, you consume 1000 gal/ yr. Then two things happen: (1) The price of gasoline rises to $2/gal and (2) a distant uncle dies, with the instruction to his executor to send you a check for $1000/yr. If no other changes in prices or income occur, do these two changes leave you better off than before?
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