Jennifer has $10 to spend on tomatoes and cheese.The price of a pound of tomatoes is $2 and the price of a pound of cheese is $4.She has found her utility-maximizing bundle at 2 pounds of tomatoes and 1.5 pounds of cheese.Suppose Jennifer's income falls to $8 and the price of tomatoes falls to $1.The price of cheese remains the same.Jennifer is considering a bundle of zero units of tomatoes and 2 units of cheese.What is your advice?
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