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Given: U = U(X,Y) = X0.2Y0.8 %3D | = (Px)(X) + (Py)(Y) | = 100 Рx0 %3D 2 Px1 = 4 Py = 2 %3D Find compensating variation (CV) when price of Good X increases from 2 to 4: 1) 11.50 2) 12.95 3) 13.86 4) 14.92

Given: U = U(X,Y) = X0.2Y0.8 %3D | = (Px)(X) + (Py)(Y) | = 100 Рx0 %3D 2 Px1 = 4 Py = 2 %3D Find compensating variation (CV) when price of Good X increases from 2 to 4: 1) 11.50 2) 12.95 3) 13.86 4) 14.92

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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Given: U = U(X,Y) = X0.2Y0.8 %3D | = (Px)(X) + (Py)(Y) %3D | = 100 Рх0 %3D 2 Px1 = 4 Py = 2 %3D Find compensating variation (CV) when price of Good X increases from 2 to 4: 1) 11.50 2) 12.95 3) 13.86 4) 14.92
Transcribed Image Text:Given: U = U(X,Y) = X0.2Y0.8 %3D | = (Px)(X) + (Py)(Y) %3D | = 100 Рх0 %3D 2 Px1 = 4 Py = 2 %3D Find compensating variation (CV) when price of Good X increases from 2 to 4: 1) 11.50 2) 12.95 3) 13.86 4) 14.92
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