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dskmvld dskmvld
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5 years ago
Suppose that the quantity of hamburgers is measured along the vertical axis and that the number of bags of popcorn is measured along the horizontal axis. The budget constraint has a vertical intercept of 10 hamburgers, and the slope of the line is -1. If the price of popcorn doubles, we know that

• the new equilibrium will have a marginal rate of substitution of -2.

• the vertical axis of the budget line shifts to 5 hamburgers.

• the consumer will buy half as many bags of popcorn as before.

• the new equilibrium will have a marginal rate of substitution of -0.5.
Textbook 
Economics Today: The Micro View

Economics Today: The Micro View


Edition: 19th
Author:
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Kutthroat K.Kutthroat K.
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5 years ago
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dskmvld Author
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5 years ago
Brilliant ツ
kc123
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Yesterday
Thanks
Danivalda
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2 hours ago
You make an excellent tutor!
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