Econ212+Spring2013+Le_Linh+Notes_for_Week_01

2 two goods are often enough p1x1 x2 m p2 1 the

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Unformatted text preview: traint of the consumer requires that the amount of money spent on the two goods be no more than the total amount the consumer has to spend x1, x2, m: budget set 2.2. Two goods are often enough p1x1 + x2 ≤ m (p2 = 1) à༎ the amount of money spent on good 1, p1x1, plus the amount of money spent on all other goods (a.k.a composite good), x2, must be no more than the total amount of money the consumer has to spend, m. 2.3. Properties of the Budget Set Budget line: p1x1 + p2x2 = m (se...
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