Question

a) Graphically identify two alternative money measures of welfare for an imposed change in the level...

a) Graphically identify two alternative money measures of welfare for an imposed change in the level of an environmental service flow (S1 > S0).

b) Discuss the pros and cons of the measures you demonstrated above

c) Distinguish between the compensating and equivalent measures using both expenditure and indirect utility function approaches. Explain the difference between the two in words.

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Answer #1

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