Question: In class, we noticed that our compensating variation and equivalent variation of the same policy might be different amounts o f money. We also showed

In class, we noticed that our compensating variation and equivalent variation of the same policy might be different amounts o f money. We also showed this fact in an indifference curve diagram. Now we want to show that this is also true for a generic consum er with utility U(x,y)= xy and budget M

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