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Question 2A A household consumes only two types of food, rice (R) and meat (M). The household has a monthly budget of $500 for food.
Question 2A A household consumes only two types of food, rice (R) and meat (M). The household has a monthly budget of $500 for food. The price per pound of meat is $15. The price per pound of rice increased from $5 to 510. Show the following on a well-Eabeled graph. [5] a. The effect of the increase in the price of rice on the budget constraint. b. The effect of the increase in the price on the optimal consumption bundle, assuming that rice is a Giffen good. indifference curves and decomposition of different effects are NOT required
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