Question
A consumer has a quasi-linear utility function (u=V(x1)+X2). Further, suppose income is 50, initially p1=p2=1, but then p1 rises to 2. Show graphically the CV
A consumer has a quasi-linear utility function (u=V(x1)+X2). Further, suppose income is 50, initially p1=p2=1, but then p1 rises to 2. Show graphically the CV and EV associated with this price increase for good 1. Which is larger? Why?
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Intermediate Microeconomics and Its Application
Authors: Walter Nicholson, Christopher M. Snyder
12th edition
978-1133189022, 1133189024, 1133189032, 978-1305176386, 1305176383, 978-0357687000, 978-1133189039
