You have k20per week to spend  and two possible uses for this money,:telephoning friends back home and drinking coffee. Each hour of phoning costs k2 and each cup of coffee costs k1. Your utility functions U(X,Y)=XY,where X is the hours of phoning you do and Y the number of cups of coffee you drink.  How much income per week will enable you to achieve the same quantities at the new process the ones you chose before? What income will enable you to attain the same utility as you did before.? Comment on your answer in the context of equivalent variation and compensation variation

Q: u

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