Let x1 be the increase in the consumption of good 1

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Unformatted text preview: t of bumdles that cost exactly m) à༎ à༎ this represents the line in the graph below, and tells us how many units of good 2 the consumer needs to consume in order to just satisfy the budget constraint if she is consuming x1 units of good 1. The slope of the budget line - Measures the rate at which the market is willing to “substitute” good 1 for good 2. Let Δx1 be the increase in the consumption of good 1 and Δx2 be...
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This note was uploaded on 02/25/2014 for the course ECON 212 taught by Professor Mirobins during the Spring '08 term at Mt. Holyoke.

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