Equivalent variation means
A)finding an equivalent change in income that puts a person at the same utility as a change in price would.
B)equalizing excess burden across all markets.
C)finding equal tax rates that ensure quantity demanded does not change.
D)moving the same distance in either direction from a starting point on an indifference curve.

Question

Quizplus · Accepted Answer

Equivalent variation measures the change in income needed to reach the same utility level as a price change, reflecting the consumer's willingness to pay to avoid the price change.

Equivalent Variation Means