Suppose that Lucy's quasilinear utility function is U=2 (9₁) 0.5 +9₂. with p₁ = $4 and p₂ = $2 initially and p, increasing from $4 to $5. Compare her compensating variation (CV), equivalent variation (EV), and change in consumer surplus (AC Lucy's compensating variation (CV) is $0.20. (Enter your response rounded to two decimal places and include a minus sign if necessary.) Lucy's equivalent variation (EV) is $0.20. (Enter your response rounded to two decimal places and include a minus sign if necessary.)
Suppose that Lucy's quasilinear utility function is U=2 (9₁) 0.5 +9₂. with p₁ = $4 and p₂ = $2 initially and p, increasing from $4 to $5. Compare her compensating variation (CV), equivalent variation (EV), and change in consumer surplus (AC Lucy's compensating variation (CV) is $0.20. (Enter your response rounded to two decimal places and include a minus sign if necessary.) Lucy's equivalent variation (EV) is $0.20. (Enter your response rounded to two decimal places and include a minus sign if necessary.)
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 6P
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