3 You consume only Pepsi and pizza. One day, the price of Pepsi goes up, the price...

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3 You consume only Pepsi and pizza. One day, the price of Pepsi goes up, the price of pizza goes down, and you are just as happy as you were before the price changes.

a Illustrate this situation on a graph.

b How does your consumption of the two goods change1 How does your response depend on income and substitution effects?

c Can you afford the bundle of Pepsi and pizza you consumed before the price changes1

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Principles Of Microeconomics

ISBN: 125206

8th Edition

Authors: Joshua Gans, Stephen King, Martin Byford, N Gregory Mankiw

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Question Posted: Nov 04, 2024 09:00 AM

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3 You consume only Pepsi and pizza. One day, the price of Pepsi goes up, the price...

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Principles Of Microeconomics

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