Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels when sushi costs $2 per piece
June 7th, 2024
Suppose that with a budget of $200, Deborah spends $120 on sushi and $80 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel, she spends $50 on sushi and $50 on bagels.Instructions: Enter your answers as whole numbers.a. How many pieces of sushi and how many bagels did Deborah consume before the price change? Pieces of sushi = . Bagels = .b. At the new prices, how much money would it have cost Deborah to buy those same quantities (the ones that she consumed before the price change)? $.c. Given that it used to take Deborah’s entire $200 to buy those quantities, how big is the income effect caused by the reduction in the price of bagels?