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Assignment help 6295

Here is the whole question I only need part c answered (i think it is referring to comensating variation and equivalence variation)I need help asap!1. Joey consumes only two goods: beers and pizza. He always gets the sameadditional satisfaction from 5 units of beers as he does from 1 slice ofpizza. His income is 100, and the price for beer is 1.a) Write down the explicit form of his utility function where P denotesthe amount of pizza and B denotes the amount of beer. Find thedemand for pizza and sketch the graph of the demand.b) Suppose the price for pizza goes up from 4 to 10. Find the substitu-tion eect and the income eect. Explain your ndings. Illustratethem by a graph where pizza is on the horizontal axis and beer ison the vertical axis.c) Joey feels very sad about the price change. Chandler attempts toexplain some economics to Joey. State whether or not the followingstatements of Chandler is correct Don’t feel sad, Joey. If I give you 25$, you would be just as happy asbefore the price increase. This price increase is equivalent for you to lose 25$ in street when thepizza price was 4.

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