Lecturenotes5ECON2310F12

But nevertheless the measurement of welfare is now in

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 11 Consumer Surplus (cont.) •  We have seen that a change in the price leads to a change in the consumer’s uGlity level. However, we don’t know what uGlity means. •  However, we can convert those changes in uGlity levels into income changes needed to achieve the level of uGlity either before or aher a price change: –  The change in income a consumer would need aher a price change in order to be just as well off as before the price change (CompensaGng VariaGon). –  The change in income a consumer would need before a price change in order to be just as well off as aher the price change (Equivalent VariaGon). Intermediate Microeconomics ECON*2310/Annen 12 4 12 ­09 ­19 Consumer Surplus (cont.) •  These are hypotheGcal income changes. •  But nevertheless: The measurement of welfare is now in monetary units. We have a welfare measure fo...
View Full Document

This note was uploaded on 12/21/2012 for the course ECON 2310 taught by Professor Eadomiat during the Fall '10 term at University of Guelph.

Ask a homework question - tutors are online