In order to compensate our consumer for the reduction in price of ramen noodles we take away (a strange idea of compensation isn't it) enough income so that she can just purchase her original bundle at the new prices. This will place her on the compensated budget constraint show to the right. This constraint allows her to exactly afford her original utility at the new prices. This will enable us to separate the income and substitution effects of the price change, as before.
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