Marvin has a COBD-Douglas utility function, 0.5 U=q₁ 110.59₂0 his income is Y = $700, and initially he faces prices of p₁ = $4 and p₂ = $2. If p₁ increases from $4 to $5, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's compensating variation (CV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) Marvin's change in consumer surplus (ACS) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) Marvin's equivalent variation (EV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.)

Marvin has a COBD-Douglas utility function, 0.5 U=q₁ 110.59₂0 his income is Y = $700, and initially he faces prices of p₁ = $4 and p₂ = $2. If p₁ increases from $4 to $5, what are his compensating variation (CV), change in consumer surplus (ACS), and equivalent variation (EV)? Marvin's compensating variation (CV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) Marvin's change in consumer surplus (ACS) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.) Marvin's equivalent variation (EV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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