Question

An economy consists of two individuals, Lynne and Jonathan, whose utility levels are given by U L and U J , respectively.
a. Suppose that the social welfare function is
W =UL+ UJ
True or false: Society is indifferent between giving a dollar to Lynne and a dollar to Jonathan.
b. Now suppose that, instead, the social welfare function is
W =UL+ 8UJ
True or false: Society values Jonathan’s happiness more than Lynne’s.
c. Now suppose that, instead, the social welfare function is
W= min[UL, UJ]
True or false: In this society, the optimal distribution of income is complete equality.


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  • CreatedMarch 25, 2015
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