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Unformatted text preview: What happens if prices change? What is the opportunity cost of x1 & x2? Question to ponder: what are you endowed with? x 2 x 1 x 2 x 1 x 2 x 1 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 20 18 16 14 12 10 8 6 4 2 Composite good Kinked budget sets Ice cream is $4 a pint, but there is a 50% off sale (limit 4). Your income is $20. Represent the budget set graphically & mathematically Socks cost $5 a pair, then $4 after you buy 12. Shoes cost $20 a pair. Your income is $100 Represent graphically & mathematically The hardware store has a buyonegetonehalfoff sale on saws. Normal price of saws is $40. You have $180. Represent graphically Pairs of socks Pairs of shoes saws Pints of ice cream...
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 Spring '08
 Woroch
 Microeconomics

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