【正文】 Welfare CV and EV Consumer39。) () change in cost of hitting utility level u39。s story number 1 u = V(p39。s 39。s welfare... ? ?M For example see the effect of varying ine... M = C(p, V(p, M)) M = C(p, u) 1=Cu(p, u) VM(p, M) To get a relationship between the slopes of C and V From the two Lagrangeans we get... marginal cost (in terms of utility) of a dollar of the budget Cu(p, u) = l marginal cost of utility in terms of money VM(p, M) = n l = 1 / n This gives us a framework for the evaluation of marginal changes of ine... ...but does this give us what we need? And from the condition on the slopes ),(( 212211 zzuuzwzw ???? l?)(),( 221121 zwzwMvzzu ?????Cost Minimisation Utility Maximisation The Consumer Opportunities and Preferences Optimisation and Comp. Statics Aggregation Welfare CV and EV Consumer39。 is the price vector after good 1 bees cheaper. ? This again causes utility to rise from u to u39。 ?p) Welfare change as D(cost) The concepts we have developed are regularly put to work in practice. Usually this is done using some (acceptable?) approximations... Welfare measures applied... what39。re right. It39。 Alf amp。B ? x 1 x 2 ? A39。 n i=1 i i = S p x39。, u39。 Here39。s best for them... ?...So that the preference map can be used as a guide. ?We need to look more closely at the concept of maximised utility... ?...the indirect utility function again. How do we measure an individual39。s surplus Utility and Ine Consumer 39。. ? But now, if the price fall had not happened, what hypothetical change in ine would have brought the person to the new utility level? Here39。s the change in cost of hitting the base welfare level u? I = CV C(p39。s using ’s lemma again () change in cost of hitting utility level u. If positive we have a welfare increase. Another (equivalent) form for CV... CV(p?p39。 Bill Alf Bill ? B ? A ? A39。 ...prices change the same way. Similarly for Bill. Different resources and pre