Question: Case 4: a = 6. bec= 0 12. What is this case called? 13. What is the marginal utility from keeping money (express in terms


Case 4: a = 6. bec= 0 12. What is this case called? 13. What is the marginal utility from keeping money (express in terms of x, )? os - Sep 20, Doc 2.jpg III 14. What is the marginal utility from giving money (express in terms of x, )? 15. What is the optimal gift to the recipient, x, ?All questions in this homework assignment are based on the following information about a donor (person 1), who is considering giving money to a recipient (person 2). The donor has the following utility function: u =am +b . my +c. x, where m, : total money received by person i from all sources x : amount of donor's endowment allocated to person i 1 : person i's endowment, I = x + x, = 145, 1, = 5 a, b, c 2 0: fixed parameters The sections below correspond to different cases involving different values for the fixed parameters of the donor's utility function and refer to the donor's optimization problem under these differing assumptions. Assume m, = x except where otherwise indicated
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