1. Suppose a consumer's utility function is given by U(X,Y) = MIN (4X, Y).Also, the consumer has $40 to spend, and the price of Good X, P_X = $1.Let Good Y be a composite good whose price is P_Y = $1.So on the Y-axis, we are graphing the amount of money that the consumer has available to spend on all other goods for any given value of X.

Now suppose P_X increases to $4.

i) Calculate the Compensating Variation:

CV = _____________________

ii) Calculate the Equivalent Variation:

EV = _____________________