Question: Suppose that the consumer's utility has the form ????(????, ????) = 10???????????? + ????, where ???? is the amount of meat and ???? is the

Suppose that the consumer's utility has the form ????(????, ????) = 10???????????? + ????, where ???? is the amount of meat and ???? is the money spent on other groceries. The price of meat is ???? per kilogram, and the consumer's income is ????(???? > 10).

1.Derive the demand functions for both ???? and ????.

2.Now let m = 50. Suppose the price of good 1 has increase from ????=1 to ????' = 2. Compute the CV and EV.

Based on what you obtained in part (2) what is the relationship between CV and EV

(are they equal? are they different? or impossible to say)? Is this always the case? Explain.

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