3 Measuring welfare changes An agent has utility function U(x) = min{x1, x2, x3} over X = R 3 +, and wealth w. 1. Find the Marshallian demand functions for each good. What is the agent's indirect utility function? 2. Suppose prices are initially p1 = 1, p2 = 2, p3 = 3, and all prices triple. Calculate the compensating and equivalent variations. 3. Suppose all prices are initially 2, and the price of good 1 drops by 50%. Calculate the compensating and equivalent variations and the change in consumer surplus.