Essay
A consumer has the quasi-linear utility function
U(q₁,q₂)= 64q₁¹/² + q₂
Assume p₂ = 1 and Y = 100.Find the consumer's compensating and equivalent variations for an increase in p₁ from 1 to 2.
Correct Answer:
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First,find her demand for good 1:
q₁ = 1...View Answer
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Correct Answer:
Verified
q₁ = 1...
View Answer
Unlock this answer now
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