Kristina consumes only goods X and Y.Her income is $600 and her utility function is U(x, y) = max{x, y}, where x is the number of units of X she consumes and y is the number of units of Y she consumes.The price of good Y is 1.The price of good X used to be 1/2 but is now 2.The equivalent variation of this price change for Kristina is

A) $300.
B) $600.
C) $150.
D) $800.
E) None of the above.

Equivalent Variation

A measure in economics that captures the change in income needed to reach a utility level after a price change, keeping welfare constant.

Utility Function

A mathematical model used in economics to represent a consumer's preference ranking for different bundles of goods, showing satisfaction levels.

Consumption

The act of using goods and services to satisfy needs or wants.