Effect on the budget line you just constructed using grid

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Say your consumption bundle consisted of beer and wine. Wine cost $20 and beer cost $5. Construct a budget line for the all possible consumption bundle for beer and wine if your budget is $100. If you got a raise and your budget is now $200 construct a new budget line for all possible consumption bundle on the same grid. One a new grid construct another budget line for a budget of $200. Now if the price of beer decrease to $10 show the effect on the budget line you just constructed using the same grid.

Reference no: EM131076318

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