Consider two goods, x_1 = oatmeal raisin cookies and x_2 = composite good. Assume oatmeal raisin…
Consider two goods, x1=x1= oatmeal raisin cookies and x2=x2= composite good. Assume oatmeal raisin cookies are a normal good. And assume that the consumer faces the standard budget line, p1x1+p2x2=mp1x1+p2x2=m (you may set p2=1p2=1 if you want).
A) Suddenly the price of oatmeal raisin