Sam's is interested in two goods, X and Y. His indirect utility function is U* = M px-0.9 py0.9-1. ( same as U* = M /(px0.9 py1-0.9 ) ) where M is Sam's income, and px and py denote respectively the price of good X and the price of good Y. Sam's market demand function for good X is X*=0.9M/px . Assuming his income is M=564 and price of good Y is equal to 4, find the absolute value of the change in Sam's consumers surplus if the price of good X rises from 1 to 9 dollars and enter this value below.
Sam's is interested in two goods, X and Y. His indirect utility function is U* = M px-0.9 py0.9-1. ( same as U* = M /(px0.9 py1-0.9 ) ) where M is Sam's income, and px and py denote respectively the price of good X and the price of good Y. Sam's market demand function for good X is X*=0.9M/px . Assuming his income is M=564 and price of good Y is equal to 4, find the absolute value of the change in Sam's consumers surplus if the price of good X rises from 1 to 9 dollars and enter this value below.
Chapter5: Income And Substitution Effects
Section: Chapter Questions
Problem 5.5P
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Sam's is interested in two goods, X and Y. His indirect utility function is
U* = M px-0.9 py0.9-1. ( same as U* = M /(px0.9 py1-0.9 ) )
where M is Sam's income, and px and py denote respectively the
Sam's
Assuming his income is M=564 and price of good Y is equal to 4, find the absolute value of the change in Sam's
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