Suppose we have two individuals in our economy with incomes of 100 and 50. We introduce...

 

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Suppose we have two individuals in our economy with incomes of 100 and 50. We introduce a policy that results in the two individuals having income of 25 and 25. Assume the standard utilitarian social welfare function discussed in class, and circle the correct answers below for what the policy does to DWL, the Gini, and social welfare. You do not need to provide explanations. DWL Gini Social welfare $55 Up Down Stays the same Up Down Stays the Same Up Down Stays the Same Suppose we have two individuals in our economy with incomes of 100 and 50. We introduce a policy that results in the two individuals having income of 25 and 25. Assume the standard utilitarian social welfare function discussed in class, and circle the correct answers below for what the policy does to DWL, the Gini, and social welfare. You do not need to provide explanations. DWL Gini Social welfare $55 Up Down Stays the same Up Down Stays the Same Up Down Stays the Same

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Lets break down each aspect and discuss the effects of the policy on Deadweight Loss DWL ... View the full answer