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If you can, please answer the second part too, thumb up guaranteed: Frank's preferences over q1 and q2 are given by U(q1,q2)=q11/2q21/2, and he has
If you can, please answer the second part too, thumb up guaranteed:
Frank's preferences over q1 and q2 are given by U(q1,q2)=q11/2q21/2, and he has an income of Y=128. The price initial prices are p1=4 and p2=16. Suppose that the price of q1 increases to 11 . What are the compensating variation (CV) and the equivalent variation (EV) in absolute value? CV=104.12andEV=87.64CV=84.26andEV=50.81CV=33.87andEV=47.05CV=99.98andEV=84.12CV=120.56andEV=78.76 Based on the question before, we know that CV>CS>EVCV=CSStep by Step Solution
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