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With a given p base x a consumer consumes an initial bundle (10,10), achieving a utility of 10. The corresponding budget line has a slope
With a given p base x a consumer consumes an initial bundle (10,10), achieving a utility of 10. The corresponding budget line has a slope -1. Doubling P base x causes the budget slope to double and the consumption bundle to change to (3,7) achieving a utility of 6. What is the wealth effect of this shift on the consumption of good X?
There is a bundle (10.0,14.0) which achieves utility 10 while lying on indifference curve at a point that has a slope -2*1.
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