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The impact of a price change on an individuals welfare can be described using the measures Compensating Variation (CV) and Equivalent Variation (EV). For example

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The impact of a price change on an individuals welfare can be described using the measures Compensating Variation (CV) and Equivalent Variation (EV). For example if the price of a good x increases by 2 SEK and we nd that the estimations of an individuals CV =25 and EV = 20. What do these numbers mean in words? Be as - precise as possible. Explain also, why we use these measures rather than, the change in utility? - L

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