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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.
Illustrate what are they, and what impacts do they have on the outcomes of Keynesian countercyclical policies.
For a competitive market-a seller can always increase her profit by raising the price of her product. if a seller charges more than the going price, buyers will go elsewhere to make their purchases.
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Results of drilling are 15 dry holes, 12 gas producers, 18 oil wells, and 20 wells producing both oil and gas.
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Suppose that a monopolist sells a product to consumers with an aggregate demand that is downward sloping in quantity, D(Q) = 200 − 2Q. The total cost of producing Q units is C(Q) = 20Q + 2Q2. What are the consumer and producer surpluses (CS and PS) a..
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