Suppose that Lucy's quasilinear utility function is U-2(01)05 +92' with p₁ =$2 and p2 = $2 initially and p₁ increasing from $2 to $4. Compare her compensating variation (CV), equivalent variation (EV), and change in consumer surplus (ACS). Lucy's compensating variation (CV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.)

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter10: Introduction To Simulation Modeling
Section: Chapter Questions
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Suppose that Lucy's quasilinear utility function is
U-2(01)05
+92'
with p₁ =$2 and p2 = $2 initially and p₁ increasing from $2 to $4. Compare her compensating variation (CV), equivalent variation (EV), and change in consumer surplus (ACS).
Lucy's compensating variation (CV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.)
Transcribed Image Text:Suppose that Lucy's quasilinear utility function is U-2(01)05 +92' with p₁ =$2 and p2 = $2 initially and p₁ increasing from $2 to $4. Compare her compensating variation (CV), equivalent variation (EV), and change in consumer surplus (ACS). Lucy's compensating variation (CV) is $ (Enter your response rounded to two decimal places and include a minus sign if necessary.)
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