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      Question

        Which method is used by Hicks to eliminate the income

      effect when price of a product is changed
      A Compensating variation in income Correct Answer Incorrect Answer
      B The cost difference Correct Answer Incorrect Answer
      C The over compensation effect Correct Answer Incorrect Answer
      D Substituting variation in price Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Compensating variation in income method is used by Hicks to eliminate the income effect when price of a product is changed.

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