Suppose that a researcher computes consumer surplus using an area below the Walrasian demand because it is the only demand that is observable. The researcher analyzes the demand for the good x, and from the data, she observes that richer people buy less of the good x than poorer people. Then:

Question

Answer

If the price of the good x increases, the calculated loss in consumer surplus will be greater than the real loss of consumers measured in terms of CV.

Answer

If the price of the good x increases, the calculated loss in consumer surplus will be lower than the real loss of consumers measured in terms of CV.

Answer

If the price of the good x increases, the calculated gain in consumer surplus will be greater than the real gain of consumers measured in terms of CV.

Answer

If the price of the good x increases, the calculated gain in consumer surplus will be lower than the real gain of consumers measured in terms of CV.

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Suppose that a researcher computes consumer surplus using an area below the Walr...

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