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extra_credit - and that lobster and butter are...

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Extra Credit Economics 304K: Principles of Microeconomics Prof. Meg Ledyard Due Wednesday, 11/17/04 Please Read: This problem is worth 5 points toward your grade on Midterm 2. If you end up dropping Midterm 2, I will apply it to the next lowest grade. You can ask anyone but me for help. If you don’t know anyone else in the class, let me know, and I will help you find people to work with. Suppose that Grace has an income of $150. Suppose that she can buy lobster and butter,
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Unformatted text preview: and that lobster and butter are compliments (NOT perfect compliments). Derive two demand curves for butter, one when the price of Lobsters is $1, and one when the price of Lobsters is $15. (hint: what happens to the demand for a good when the price of its compliment increases?). Derive at least 2 points for each demand curve. Make sure that it is clear what your procedure is for finding these points....
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