Problem
Sally consumes housing (denote the number of units of housing by h) and other goods (a composite good whose units are measured by y), both of which she likes. Initially she has an income of $100, and the price of a unit of housing (Ph) is $10. At her initial basket she consumes 2 units of housing. A few months later her income rises to $120; unfortunately, the price of housing in her city also rises, to $15. The price of the composite good does not change. At her later basket she consumes 1 unit of housing. Using revealed preference analysis (without drawing indifference curves), what can you say about how she ranks her initial and later baskets?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.