a)Draw an indifference curve diagram to illustrate the compensating and equivalent variation of a fall in the price of a normal good (all other things equal).Which of these two methods of measuring the change in consumer welfare is larger and why?

(25 percent of marks)

b)A consumer's utility function is

The consumer's demand functions for goods X and Y are

and

Calculate the Compensating Variation for an increase in price where:

*Round Values to the Nearest Whole Number*