Ejercicio Test 5 - b · Microeconomía I UPF 2019

Test 5. Questions 1-8 (June 2, 2020)

b. Carmen's utility is $u(x, y) = \min\{3x, y\}$, where $x$ is pairs of earrings and $y$ is money for other goods. With an income of 18€, the price of earrings increases from 6€ to 15€. What is the compensating variation (CV) of this price increase?