Question
Suppose that a consumer has a utility function (1,2)=(1^1/4(2^3/4). She originally faces prices (2,1) and has income $200. Then the price of good 1 increases
Suppose that a consumer has a utility function (1,2)=(1^1/4(2^3/4). She originally faces prices (2,1) and has income $200. Then the price of good 1 increases to $5. Calculate the compensating and equivalent variations.
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Industrial Relations in Canada
Authors: Fiona McQuarrie
4th Edition
978-1-118-8783, 1118878396, 9781119050599 , 978-1118878392
