Consider the following expenditure function: e(p, u) u -1 P1+ P2 i. Derive the money metric compensation function. 2 = = ii. Evaluate the EV and CV for the changes: a) from (po, wo) = (1,1,1) to (P1, wi) = (1,1,2), (, b) from (Po, wo) = (1,1,1) to (P2, W2) = (2, 1,5/2). Which is the preferred change and why? = = Consider the following expenditure function: e(p, u) u -1 P1+ P2 i. Derive the money metric compensation function. 2 = = ii. Evaluate the EV and CV for the changes: a) from (po, wo) = (1,1,1) to (P1, wi) = (1,1,2), (, b) from (Po, wo) = (1,1,1) to (P2, W2) = (2, 1,5/2). Which is the preferred change and why? = =