Question: Compensating Variation and Equivalent Variation are not necessarily the same amount. The reason for the difference is that money before a price change and money

Compensating Variation and Equivalent Variation are not necessarily the same amount. The reason for the difference is that money before a price change and money aer a price change mean different things. We'll explore this with the help of a beat of little brain. Pooh's preferences over goods 1 and 2 can be represented by the utility function u(x1, x2) = x1 + x2, and Pooh has an income of $60 to spend each month

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