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I currently spend all my income on coffee and cake. I buy positive quantities of each, and my preferences satisfy all the usual assumptions.
I currently spend all my income on coffee and cake. I buy positive quantities of each, and my preferences satisfy all the usual assumptions. The price of coffee is 5 per cup and the price of cake is 1.25 per slice. At my best affordable bundle, what is the maximum number of slices of cake that am I willing to give up in exchange for one cup of coffee? a. 0.25 slices of cake. b. 0.4 slices of cake. c. Four slices of cake. d. 25 slices of cake.
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