loui's preferences over pizza (x) and other goods (y) are given by U(X,Y)=XY^2, with associated marginal utilities. his income is $240. question d @) calculate his optimal basket when Px=8 and Py=1. b) calculate his income and substitution effects of a decrease in the price of food to $6. c) calculate the compensating variation of the price change. d)calculate the equivalent variation of the price change.
loui's preferences over pizza (x) and other goods (y) are given by U(X,Y)=XY^2, with associated marginal utilities. his income is $240.
question d
@) calculate his optimal basket when Px=8 and Py=1.
- b) calculate his income and substitution effects of a decrease in the price of food to $6.
- c) calculate the compensating variation of the price change.
- d)calculate the equivalent variation of the price change.
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