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Trevor always begins the day with a strawberry milkshake (milk (x 1 ) and strawberries(x 2 ) mixed in proportion 1:5). His income is equal
Trevor always begins the day with a strawberry milkshake (milk (x1) and strawberries(x2) mixed in proportion 1:5). His income is equal to m=200, and one strawberry costs p2=1. Suppose the price of milk drops from p1=15 to p1=5. Which of the following is correct?
a.None of the above.
b.the income effect in demand for milk is 0.
c.the total change in demand for milk is 10.
d.the substitution effect in demand for milk is 10.
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