Intermediate econ mc questions:
1. 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 $9 for earrings, when the price of earrings went up to $14, then the equivalent variation of the price change was: Ans is 4, please show steps and explain, thank you.
2. Holly consumes only goods X and Y . Her income is 600 and her utility function is U(x; y) = max(x,y), where x is the number of units of X she consumes and y is the number of units of Y she consumes. The price of good Y is 1. The price of good X used to be 1/2; but is now 2. The equivalent variation of this price change for Holly is:
please show steps and explain, thank you. answer is 300.
3. Ella's utility function is min( 4x, y). If the price of x is 15 and the price of y is 20, how much money would she need to be able to purchase a bundle that she likes as well as the bundle (x; y) = (5; 8)? please show steps and explain, thank you. answer is 190.