Consider the Marshallian (uncompensated) demand (Pz. Py, 1) = In case of a price increase for good x, in absolute terms, Sp.I O The compensating variation will be equal to the equivalent variation and equal to the change in the consumer surplus O The compensating variation will be greater than the equivalent variation and greater than the the change in the consumer surplus O The compensating variation will be greater than the equivalent variation but smaller than the the change in the consumer surplus O The compensating variation will be smaller than the equivalent variation and smaller than the the change in the consumer surplus O The compensating variation will be smaller than the equivalent variation but greater than the the change in the consumer surplus
Consider the Marshallian (uncompensated) demand (Pz. Py, 1) = In case of a price increase for good x, in absolute terms, Sp.I O The compensating variation will be equal to the equivalent variation and equal to the change in the consumer surplus O The compensating variation will be greater than the equivalent variation and greater than the the change in the consumer surplus O The compensating variation will be greater than the equivalent variation but smaller than the the change in the consumer surplus O The compensating variation will be smaller than the equivalent variation and smaller than the the change in the consumer surplus O The compensating variation will be smaller than the equivalent variation but greater than the the change in the consumer surplus
Chapter6: Demand Relationships Among Goods
Section: Chapter Questions
Problem 6.9P
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