Utility-maximizing bundle

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Jennifer has $10 to spend on tomatoes and cheese. The price of a pound of tomatoes is S2 and the price of a pound of cheese is $4. She has found her utility-maximizing bundle at 2 pounds of tomatoes and 1.5 pounds of cheese. Suppose Jennifer's income falls to S8 and the price of tomatoes falls to $1. The price of cheese remains the same. Jennifer is considering a bundle of zero units of tomatoes and 2 units of cheese. What is your advice?

Reference no: EM13999748

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