a. If Jim changes the quantities that he buys, will he buy more or fewer muffins and
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a. If Jim changes the quantities that he buys, will he buy more or fewer muffins and more or less coffee?
b. When the prices change, will there be an income effect, a substitution effect, or both at work?
Jim has made his best affordable choice of muffins and coffee. He spends all of his income on 10 muffins at $1 each and 20 cups of coffee at $2 each. Now the price of a muffin rises to $1.50 and the price of coffee falls to $1.75 a cup.
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a Understanding how price changes alter consumption requires the understanding of two driving principles the income effect and the substitution effect ...View the full answer
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Gabriela Rosalía Castro
I have worked with very different types of students, from little kids to bussines men and women. I have thaught at universities, schools, but mostly in private sessions for specialized purpuses. Sometimes I tutored kids that needed help with their classes at school, some others were high school or college students that needed to prepare for an exam to study abroud. Currently I'm teaching bussiness English for people in bussiness positions that want to improve their skills, and preparing and ex-student to pass a standarized test to study in the UK.
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