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Ned buys goods X and Y. He can just afford the bundle X = 4 and...

Ned buys goods X and Y. He can just afford the bundle X = 4 and Y = 4. He can also afford X = 6 and Y= 3. Each of these bundles exhausts his income. For full credit, show all necessary work to answer the questions below.

  1. What is the ratio of the price of x to the price of y?

  2. Write an equation that gives you Ned's budget line.

  3. If Ned spent all his money on x, how much x could he buy? If he spent all your money on

    y, how much y could she buy?

  4. Draw Ned’s budget line.

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