Economics Joe has morning commute budget of $36. He spends these money on buying gasoline for the vehicle he uses for commuting and the rest of the budget he spends on macchiato from a local coffee shop he stops at by the way to office. Since morning is important for Joe, he usually chooses a picturesque route with nice views and relaxed traffic. One day Joe realized that the price of gasoline when up from $3 per gallon to $6, and the price of macchiato went up from $4 per drink to $5. Joe's employer couldn't let him to suffer so Joe got a morning commute allowance from his employer so that he is compensated for the inflation. In other words, given the prices nowadays, Joe is equally well off now as he was before the inflation. Does Joe buy more or fewer macchiatos now than he did before the inflation?

Economics Joe has morning commute budget of $36. He spends these money on buying gasoline for the vehicle he uses for commuting and the rest of the budget he spends on macchiato from a local coffee shop he stops at by the way to office. Since morning is important for Joe, he usually chooses a picturesque route with nice views and relaxed traffic. One day Joe realized that the price of gasoline when up from $3 per gallon to $6, and the price of macchiato went up from $4 per drink to $5. Joe's employer couldn't let him to suffer so Joe got a morning commute allowance from his employer so that he is compensated for the inflation. In other words, given the prices nowadays, Joe is equally well off now as he was before the inflation. Does Joe buy more or fewer macchiatos now than he did before the inflation?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 1SCQ: Jeremy is deeply in love with Jasmine. Jasmine lives where cell phone coverage is poor, so he can...

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