This preview shows page 1. Sign up to view the full content.
Unformatted text preview: As long as their M v x was less than .95y, they would purchase more x, and move away from their original bundle price, in essence they would be “better off”. The consumer who apportioned her income 50/50 between X and Y will gain, as her cost of living only went up by $750, but she was compensated for $850. The typical consumer would break even, and the person who apportioned 20x and 80y, would lose, since she lost $900 to inflation and she was only compensated for $850....
View Full Document
This note was uploaded on 10/09/2011 for the course ECON 301 taught by Professor Davis during the Spring '11 term at Ball State.
- Spring '11