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Problem:
(a) Explain with the help of a diagram, the effect on a consumer's equilibrium, of an increase in the price of commodity X while the consumer's money income and price of commodity Y remains unchanged.
(b) If the government intends to restore the consumer's current welfare to its original level, illustrate how would the process of income compensation proceed to realise that objective.
(i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh
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BU 5210 Final Summer 2013 Economic Analysis
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