Multiple Choice
If Bernice (whose utility function is min{x, y}, where x is her consumption of earrings and y is money left for other stuff) had an income of $12 and was paying a price of $4 for a pair of earrings, then if the price of earrings went up to $6, the equivalent variation of the price change would be
A) $4.80.
B) $3.43.
C) $1.71.
D) $9.60.
E) $4.11.
Correct Answer:
Verified
Correct Answer:
Verified
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