Ian Views Playing Wartcraft and Drinking Soda as Perfect Complements

question 22

Essay

Ian views playing Wartcraft and drinking soda as perfect complements (one soda with one hour of playing Wartcraft).Currently,sodas are $1 each and Wartcraft costs $1 per hour.Ian has $12 of income.
a.Compute Ian's Compensating Variation if the price of Wartcraft rises to $2.
b.Compute Ian's Equivalent Variation if the price of Wartcraft rises to $2.
c.Compute Ian's change in Consumer Surplus if the price of Wartcraft rises to $2.

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Definitions:

Retinal Disparity

A binocular cue for perceiving depth based on the fact that the two eyes view the world from slightly different angles, creating a disparity that the brain interprets as depth.

Precognition

The phenomenon of knowing or sensing something before it happens, often associated with psychic abilities.

High Need

A strong requirement or desire for something, which could be physical, emotional, or psychological.

Power

The ability or capacity to influence, direct, or control the behavior of others or the course of events.