4.2 Jean views coffee and cream as perfect complements.

In the first year, Jean picks an optimal bundle of coffee and cream, e1. In the second year, inflation occurs, the prices of coffee and cream change by different amounts, and Jean receives a cost-of-living adjustment (COLA) based on the consumer price index (CPI) for these two goods. After the price changes and she receives the COLA, her new optimal bundle is e2. Show the two equilibria in a figure. Is she better off, Exercises 158 ChAPTeR 4 Demand worse off, or equally well off at e2 compared to e1? Explain.