Change in price and total expenditure

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1.  Explain how a change in price affects total expenditure by filling in each cell with the resulting change in total expenditure.

Demand is ...

Increase in Price

Decrease in Price

Elastic

 

 

Unit-elastic

 

 

Inelastic

 

 

2.  You buy only apples and bananas.  Your budget is such that you can purchase 3 apples and 4 bananas or 9 apples and 2 bananas.  Write down the equation for the budget line with bananas on the y-axis.  Is that equation unique?

Reference no: EM1311285

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