Greg has the following utility function: u=x1^0.67 x2^0.33. He has an income of $83.00, and he faces these prices: (p1,p2)=(2.00,3.00). Suppose that the price of x1 increases by $1.00. Calculate the compensating variation for this price change. Give your answer to two decimals.
Greg has the following utility function: u=x1^0.67 x2^0.33. He has an income of $83.00, and he faces these prices: (p1,p2)=(2.00,3.00). Suppose that the price of x1 increases by $1.00. Calculate the compensating variation for this price change. Give your answer to two decimals.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 16SQ
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Greg has the following utility function: u=x1^0.67 x2^0.33. He has an income of $83.00, and he faces these prices: (p1,p2)=(2.00,3.00). Suppose that the
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