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Q. A consumer is initially in equilibrium at point C. consumer's income is $300 and budget line through point C is provided by $300 = $50X + $100Y. When consumer is provided a $50 gift certificate that is good only at store X, she moves to a new equilibrium at point D.
a. Determine prices of goods X and Y.
b. Explain how many units of product Y could be purchased at point A?
c. Explain how many units of product Y could be purchased at point E?
d. Explain how many units of product Y could be purchased at point B?
e. Explain how many units of product Y could be purchased at point F?
f. Based on this consumer's preferences, rank bundles A, B, C and D in order from most preferred to least preferred.
g. Is product X a normal or an inferior good?
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All astute comments thus far. Some government projects also programs continue to give benefits for many yrs.
Once issued by the parent, It stays which way also all transfer benefits (tax breaks) are lost forever.
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As she will be in a lower tax bracket. As her financial advisor, which option do you recommend.
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