A consumer has two goods in his consumption bundle: bread and coffee. The current price of bread is $3.00 per loaf and the price of coffee is $6.00 per cup. (enter your response round to one or two decimal places as appropriate). What is the relative price of bread to coffee? (bread per unit of coffee)? Suppose that the price of bread increases by 10% and the price of coffee increases by 20% The relative price (bread per unit of coffee) has Based on the substitution effect, we would expect our consumer to buy relatively more bread, relatively more coffee or make no change to this consumption bundle?

A consumer has two goods in his consumption bundle: bread and coffee. The current price of bread is $3.00 per loaf and the price of coffee is $6.00 per cup. (enter your response round to one or two decimal places as appropriate). What is the relative price of bread to coffee? (bread per unit of coffee)? Suppose that the price of bread increases by 10% and the price of coffee increases by 20% The relative price (bread per unit of coffee) has Based on the substitution effect, we would expect our consumer to buy relatively more bread, relatively more coffee or make no change to this consumption bundle?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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