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Write down the formula for the budget constraint

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Reference no: EM132126236

Suppose a consumer is trying to make a choice over the consumption of two goods: x and y. Px = 3, Py = 4 and the income is equal to 50. Assume that the government distributes some stamps that are good to buy 5 units of good x.

Write down the formula for the budget constraint, and what happens if we allow for the stamps to be traded at a price equal to 1.

Reference no: EM132126236

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