An agent has Cobb-Douglas utility U(x,y)=xy. Prices are px=1…
An agent has Cobb-Douglas utility U(x,y)=xy. Prices are px=10 and py=10, and income is w=100. Suppose prices change to px’=20 and py’=10. The Ideal Cost of Living Adjustment (ICOLA) index is (round to two decimals and write with two decimals, e.g., 3.412 is 3.41 and 6 is 6.00)?
Read DetailsAn agent has Cobb-Douglas utility U(x,y)=xy. Prices are px=1…
An agent has Cobb-Douglas utility U(x,y)=xy. Prices are px=10 and py=10, and income is w=100. Suppose prices change to px’=20 and py’=10. The minimum income needed to achieve the same utility as before is (round to one decimal and write with one decimal, e.g., 3.41 is 3.4 and 6 is 6.0)?
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