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At current prices, housing costs 200 000 per unit and the composite good has a price of 1 per unit. A wealthy benefactor has given
At current prices, housing costs 200 000 per unit and the composite good has a price of 1 per unit. A wealthy benefactor has given Joe, a penniless person, 1 unit of housing and 200 000 units of the composite good. Now the price of housing falls by half. True, false or uncertain: Joe is better off as a result of the price change. Explain.
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