1. An employee has the utility function is U(x, y) = min(x, y) and R150 to spend. In her home town, the price of x and y are both RI each. However, her boss is thinking of transferring her to another town where the price of x is RI and the price of y is R2. The boss offers no raise in pay. The employee says that although she doesn't mind moving, having to move is as bad as a pay cut. What is the effective paycut? a) compensating variation of R50 b) equivalent variation of R50 c) equivalent variation of R 75 d) compensating variation of R75 c) compensating variation of R100 2. An employee has the utility function is U(x, y) = min(x, y} and R150 to spend. In her home town, the price of x and y are both RI each. However, her boss is thinking of transferring her to another town where the price of x is RI and the price of y is R2. The boss offers no raise in pay. The employee says that she would not mind moving, provided she receives a salary increase. What should her increase be? a) compensating variation of R50 b) equivalent variation of R50 c) equivalent variation of R75 d) compensating variation of R75 e) compensating variation of R100