Bernicersquos preferences can be represented by the utility


Bernice’s preferences can be represented by the utility function, U(x, y) = min{x, y}. She faces prices ($2, $1), and her income is $12. If prices change to ($3, $1), the compensating variation

A) equals the equivalent variation.

B) is $2 greater than the equivalent variation.

C) is $2 smaller than the equivalent variation.

D) is $1 greater than the equivalent variation.

E) There is not enough information to determine which variation is larger.

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Business Economics: Bernicersquos preferences can be represented by the utility
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