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2. (6 Total Points) Suppose a consumer's utility function is given by UXY) =MIN (4X Y). Also, the consumer has $40 to spend, and the price of Good X Px=S1. let Good Ybe a composite good whose price is Py-S1. So on the Yaxis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X Now suppose Pyincreases to $4. D Gakulate the Compensat ing Variation: CV- i)- Calculate the Equivalent Variation: EV-

2. (6 Total Points) Suppose a consumer's utility function is given by UXY) =MIN (4X Y). Also, the consumer has $40 to spend, and the price of Good X Px=S1. let Good Ybe a composite good whose price is Py-S1. So on the Yaxis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X Now suppose Pyincreases to $4. D Gakulate the Compensat ing Variation: CV- i)- Calculate the Equivalent Variation: EV-

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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2. (6 Total Points) Suppose a consumer's utility function is given by U(XY) =MIN(4X Y). Also, the consumer has $40 to spend, and the price of Good X Px=S1. let Good Ybe a composite good whose price is Py-S1. So on the Yaxis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X Now suppose Pyincreases to $4. D Cakulate the Compensating Variation: CV- i)- Calculate the Equivalent Variation: EV-
Transcribed Image Text:2. (6 Total Points) Suppose a consumer's utility function is given by U(XY) =MIN(4X Y). Also, the consumer has $40 to spend, and the price of Good X Px=S1. let Good Ybe a composite good whose price is Py-S1. So on the Yaxis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X Now suppose Pyincreases to $4. D Cakulate the Compensating Variation: CV- i)- Calculate the Equivalent Variation: EV-
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