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Consider a consumer who chooses x (p, m) = ( 1/2 , 1/2 ) when (p1, p2) = (1, 1) and m = 1. Suppose
Consider a consumer who chooses x (p, m) = ( 1/2 , 1/2 ) when (p1, p2) = (1, 1) and m = 1. Suppose that the price of good 1 changes to p 0 1 = 2; the price of good 2 changes to p'2 ; and the consumer's income changes to m0 . In this new situation with price vector (p ' 1 , p' 2 ) = (2, p'2 ) and income m' , the consumer chooses x (p ' , m' ) = ( 3/4 , 1/4 ). Give the range of parameters p '2 and m' for which the WARP is not violated in this situation.
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