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QUESTION
Suppose a consumer has a utility function defined by U = X1/2Y1/2 (MRS = Y/X) and she has an income of $312. Suppose this individual faces the...
Suppose a consumer has a utility function defined by U = X1/2Y1/2 (MRS = Y/X) and she has an income of $312. Suppose this individual faces the following prices, PX = 13 and PY = 12. If the price of good Y goes up to PʹY = 13, while everything else remains the same, find the value of this consumer's equivalent variation (EV).
