=+d. * Suppose that there are now two identical children and one parent. Keep the Edgeworth Box
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=+d. * Suppose that there are now two identical children and one parent. Keep the Edgeworth Box the same dimensions as in (a). However, because there are now two children, every action on a child’s part must be balanced by twice the opposite action from the one parent that is being modeled in the Edgeworth Box. Does the equilibrium price p* go up or down? (Hint: An equilibrium is now characterized by the parent moving twice as far on the equilibrium budget as each child.)
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Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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