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Consider a consumer with with well-behaved preferences who can spend their income on two goods, 1 and 2. Using a diagram, show and explain the
Consider a consumer with with well-behaved preferences who can spend their income on two goods, 1 and 2. Using a diagram, show and explain the income and substitution effect (as derived in class) for good 1. What conditions are necessary for the good to be a Giffen good?
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