Consider “food” as one of the goods that Adam (consumer) buys.
In the model of consumer choice, think of food as variable X
(horizontal axis) and all other goods as variable Y (vertical
axis).
Suppose that the price of food increases while all other variables
(Adam’s income, price of Y) remain the same. What is going to
happen with (a) Adam’s consumption of food and (b) Adam’s spending
on food as the percentage of his income?
Your answer should be supported by the graphical analysis (model of
consumer choice).
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