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IGNORE A) and B) Solve C), D), E) C) Find Alice's choice given this budget line, and call it (z1, z2). State the substitution effect
IGNORE A) and B)
Solve C), D), E)
C) Find Alice's choice given this budget line, and call it (z1, z2). State the substitution effect for each good.
D) After the substitution effect alone, find Alice's new utility. Is it higher, lower or equal to her utility from the choice in (a)?
E) Now find the income effect on each good.
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