Connie as you may recall always takes one cup of cookies with one cup of coffee Cookies cost 2 per cup and coffee costs 1 per cup Connie has
Connie as you may recall always takes one cup of cookies with one cup of coffee Cookies cost per cup and
Connie as you may recall always takes one cup of cookies with one cup of coffee
always takes one cup of cookies with one cup of coffee Cookies cost per cup and coffee costs per cup Connie has
Connie as you may recall always takes one cup of cookies with one
cup of coffee Cookies cost per cup and coffee costs per cup Connie has
Connie as you may recall always takes one cup of
Connie as you may recall
Connie, as you may recall, always takes one cup of cookies with one cup of coffee. Cookies cost $2 per cup, and coffee costs $1 per cup. Connie has...

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Connie, as you may recall, always takes one cup of cookies with one cup of coffee. Cookies cost $2 per cup, and coffee costs $1 per cup. Connie has $12 to spend on cookies and coffee. Consider a price drop in cookies to $1 per cup. (a) Illustrate Connie's optimal consumption bundles beforeand after the price change with a graph. Explain your reasoning. (b) Decompose the change in Connie's consumption of cookiesinto the income effect and the substitution effect. Illustrate them in the graph.

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