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Draw the budget set of the consumer

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Let x1 represent vegetables and x2 represent all other food. Vegetables cost $2/lb. The price of all other food is also $2/lb.

The government wants people to consume more vegetables, so it provides a $0.50/lb. subsidy.

Suppose the consumer has $60 to spend on food.

a) Draw the budget set of the consumer before and after the subsidy. Make sure to label the axes and intercepts.

Reference no: EM132795568

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