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29 Sep 2019
(a) The demand curve is given by D = 8002p. The price rises from 100 to 150. What is the change in consumer surplus?
Unrelatedly, if the utility is U = x3y, then demands are x = (3I)/(4px) and y = (I)/(4py). Initially, I = 15000 and px = 80 and py = 100. Then the price of good y increases to 207.36.
(b) How much would you at most be willing to pay to avoid the price change (Calculate EV)?
(c) By how much would your income need to increase to be as well after the price change as before (Calculate CV)?
(a) The demand curve is given by D = 8002p. The price rises from 100 to 150. What is the change in consumer surplus?
Unrelatedly, if the utility is U = x3y, then demands are x = (3I)/(4px) and y = (I)/(4py). Initially, I = 15000 and px = 80 and py = 100. Then the price of good y increases to 207.36.
(b) How much would you at most be willing to pay to avoid the price change (Calculate EV)?
(c) By how much would your income need to increase to be as well after the price change as before (Calculate CV)?
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watching
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Chika IlonahLv10
29 Sep 2019