Kristina consumes only goods X and Y. Her income is $600 and her utility function is U(x, y) = max{x, y}, where x is the number of units of X she consumes and y is the number of units of Y she consumes. The price of good Y is 1. The price of good X used to be
but is now 2. The equivalent variation of this price change for Kristina is
A) $300.
B) $600.
C) $150.
D) $800.
E) None of the above.
Correct Answer:
Verified
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