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Suppose a consumers indirect utility function is given by v(p; y) = y/ p 1 1/2 p 2 1/2 Suppose income is y = $30,

Suppose a consumers indirect utility function is

given by

v(p; y) = y/ p₁^1/2 p₂^1/2

Suppose income is y = $30, the price of good 1 is

p1 = $10 and the price of good 2 (p2) decreases

from $6 to $5. For this price change, find

(a) the compensating variation

(b) the equivalent variation

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