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Draw diagrams to illustrate the path dependence problem of using Marshallian consumer surplus for welfare measurements for the following cases. Clearly indicate the surplus changes

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Draw diagrams to illustrate the path dependence problem of using Marshallian consumer surplus for welfare measurements for the following cases. Clearly indicate the surplus changes 1n both cases and if they are equal 1n general. (a) Firstly, consider the two paths of changes In two scenarios Path 1: Price of x increases from $10 to $20 rst, and then price of y increases from $5 to $12. Path 2: Price of y increases from $5 to $12 rst, and then price of it increases from $10 to $20. (i) Suppose x and y are substitutes. (ii) Suppose x and y are complements. (b) In lecture presentation, we illustrate the theory of second best by using demand curves of goods X Y and Z for the ee-t1 ade zone case as well as for the monopoly case. In such a context, is using Hicksian demand curves or Marshallian demand curves more relevant? If we use Marshallian demand curves, can you give us a justication for the validity of using Marshallian

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