Question: Suppose that a consumer has a utility functionu(x1x2)=X1^(1/2)*X2^(1/2). He originally faces prices (1,1) and has income 100. Then the price of good 1 increases to

Suppose that a consumer has a utility functionu(x1x2)=X1^(1/2)*X2^(1/2). He originally faces prices (1,1) and has income 100. Then the price of good 1 increases to 2. What are the compensating variation (CV) and equivalent variation (EV)?

a.CV = 41; EV = 30.

b.CV = -41; EV = -30

.c.CV = 41; EV = -30.

d.CV = -41; EV = 30.

e.CV = 30; EV = 41.

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