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Discuss the substitution, income and total effect

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Reference no: EM13982389

1. Ben's quasilinear utility function is U = 4 x 10.5 + x2. His budget for these goods is I = 10. The price of each of the two goods is initially one (i.e., prices are unity). However, the price of x1 rises to 2. 

Discuss the substitution, income and total effect on the demand for x1. 

Reference no: EM13982389

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