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When the price of gasoline is $1/gallon, you consume 1000 gallons of gasoline per year. The two things happen (1) The price of gasoline rises
When the price of gasoline is $1/gallon, you consume 1000 gallons of gasoline per year. The two things happen (1) The price of gasoline rises to $2/gallon and (2) Your distant uncle leaves you a bequest of $1000 per year. There are not other changes to prices or your income. Do these two changes make you better off than you were before? Use budget constraints and indifference curves to answer the question.
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