An economist proposes a policy that increases the income of 70% of the population by $80 each while reducing the income of the rest population by$ 70 each.

A- would society benefit from a social planner's perspective?

B- suppose every individual in the economy is a voter. Is this policy attractive to a representative voter? Explain your answer.

C- consider the situation that the policy has been partially leaked to the voter, a percentage of x of the population is known beforehand with certainty to be the gainers, what is the range of x such that the policy proposal is rejected by the majority voting ( policy is rejected if more then 50% of the population vote against it )?

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Step 12 A It is difficult to say whether the society would benefit from this policy from a social pl... View the full answer