Exam

Consumption at point B: Cd = 1301 + .50(4032 - 100) – 500(.05) = 3242. The budget constraint shifted out parallel to the right (interest rate did not change) for two reasons 1: income went up from 3182 to 4032 and 2: something shifted the Cd function as in a rise in a, yf , af or CC. ................
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