What does your answer tell you about the size of


Nuts and bolts are perfect complements; a nut is valuable only when paired with a bolt, and vice versa. Ted spends all his money on nuts and bolts. On a graph, illustrate the effect of a compensated change in the price of nuts. Does this change alter the consumption of nuts or bolts? What does your answer tell you about the size of substitution effects resulting from changes in the price of nuts?

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Econometrics: What does your answer tell you about the size of
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