If Bernice (Whose Utility Function Is Min{x, Y}, Where X

question 26

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 $10 and was paying a price of $3 for earrings when the price of earrings went up to $4, then the equivalent variation of the price change was

• A) $2.
• B) $2.50.
• C) $5.
• D) $1.
• E) $2.25.

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