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Sam spends $6/wk on orange juice and apple. Orange juice costs $2/cup while apple juice costs $1/cup. Sam views 1 cup of orange juice as a perfect substitute for 3 cups of apple juice. Find Sam's optimal consumption bundle of orange juice and apple juice each week. Suppose the price of apple juice rises to $2/cup, while the price of orange juice remains constant. How much additional income would Sam need to afford his original consumption bundle?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M951362

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