Next Page Page 4 of 6 Question 4 (1 point) Suppose that a consumer with preferences over two goods has income 200 and faces the price vector (p1,p2). Suppose the consumer chooses to consume the bundle (120,80) and achieves a maximum utility level of 2,960 in this situation. The minimum expenditure needed at these prices in order to achieve the utility level 2,960 is Your Answer: AnswerNext Page Page 5 of 6 Question 5 (3 points) Suppose we know that a consumer has the linear Hicksian demand function x = 40 - 4 p. Here the utility term is not important and is hidden away in the intercept term (40). Suppose that the price of the good changes from 4 to 3. What is the absolute value of the compensating variation for this price change? Your Answer: Answer Next Page Page 5 of 6