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Suppose u(-) = army-5 a. Compute the utility from x* and y* assuming m is $2000, px is $4 and py is $2. b. Write
Suppose u(-) = army\"-5 a. Compute the utility from x* and y* assuming m is $2000, px is $4 and py is $2. b. Write the consumer's utility in terms of income and the prices of the goods. That is, sub expressions for x* and y* into the utility function. c. Using your utility function expression from (b), solve for m. That is, express m = f (u, px, py). Check your answer for (c) by substituting in the values of utility and prices from part (a) and making sure you get the correct level of spending [$ 2000). Suppose the price of good x rises to $6, use your answer from (d) to determine the amount of m that would be necessary to reach the same utility level as in the answer from part (a). What is the compensating variation when the price of good x increases from $4 to $6
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