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Suppose Fred's preferences are given by: (, ) = x2 The price of good X is $4.00, the price of good Y is $1.50 and

Suppose Fred's preferences are given by: (, ) = x2 The price of good X is $4.00, the price of good Y is $1.50 and Fred's income is $450 If the price of good X rises to $5.00, how much money would Fred need to receive to compensate him for the rise in price?

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Price theory and applications

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