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Posted on Jun 23, 2024

If the budget constraint is p1x1 + p2x2

If the budget constraint is p1x1 + p2x2 <= to Y

Draw a graph to show the total change in x2 from the decrease in price p2

breaking down the relevant income and Hicks substitution effects if x2 is a normal good

Also show the above question when x2 is an inferior good.

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