The price of cheese rises from 6 to 10 a kilo, while the price of wine remains

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The price of cheese rises from €6 to €10 a kilo, while the price of wine remains at €3 a glass. For a consumer with a constant income of €3,000, show what happens to consumption of wine and cheese. Decompose the change into income and substitution effects.

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Economics

ISBN: 9781408093795

3rd Edition

Authors: Mark P. Taylor, N. Gregory Mankiw

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