Suppose that the price of soda remains at $l a can but the price of coffee rises
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Suppose that the price of soda remains at $l a can but the price of coffee rises to $3 a cup. Draw Amy’s new budget line. If she buys 6 cans of soda, what is the maximum number of cups of coffee she can buy in a week? Has the relative price of coffee changed?
Amy has $12 a week to spend on coffee and soda. The price of coffee is $2 a cup, and soda is $1 a can.
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