| Question | A consumer must divide $250 between the consumption of product X and product Y. The relevant market prices are Px = $5 and Py = $10. a. Write the equation for the consumer’s budget line. b. Illustrate the consumer’s opportunity set in a carefully labeled diagram. c. Show how the consumer’s opportunity set changes when the price of good X increases to $10. How does this change alter the market rate of substitution between goods X and Y? |
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| Subject | business-economics |
