Question: 4 ( a ) Find the equation for budget line ( BL 1 ) when the price of food is $ 9 . 4 (
a Find the equation for budget line BL when the price of food is $
b Find the initial consumption bundle A when the price of food is $
c Find Jennifers utility U at consumption bundle A
d Find the equation for budget line BL when the price of food is $
e Find the consumption bundle C when the price of food is $ Find Jennifers utility U at consumption bundle C
f Find the equation for budget line BLd when the price of food is $ and income is Id
g Find the consumption bundle B using budget line BLd and U FC
h Find the income and substitution effects and show that
Price Effect PE Income Effect IE Substitution Effect SE Points Jennifer buys two goods, food F and clothing C with the utility function Assume initially
that she has an income of $ the price of clothing is $ per unit, and the price of food is initially $ per
unit and that the price subsequently falls to $ per unit. Use this information and the accompanying graph to
answer the following questions.
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