QUESTION 1

(a) Explain the differences between utilitarian and Rawlsian social welfare functions. Support

your explanation with a graphical representation for each of them. (2 points)

(b) True or false? "Utilitarianism implies that a dollar given to one person is as important as a

dollar given to anyone else". Justify your answer. (2 points)

(c) Suppose the utility possibilities frontier for two consumers (Anne and Ben) is represented

by the equation U B2 = 150 - 5U A2 , where UA and UB stand for the utilities of Anne and Ben

respectively.

(a) What is the optimal level of UA and UB according to the Rawlsian criterion? (2 points)

(b) What is the optimal level of UA and UB according to the utilitarian criterion? (2points)

(c) Provide a graphical representation in the (UA ,UB)-space. (2 points)

QUESTIGN 1 {a} Explain the differences between utilitarian and Rawlsian social Welfare functions. Support your explanation with a graphical representation for each of them. {2 points) {Is} Tom or false? \"Utilitarianism implies that a dollar given to one person is as important as a dollar given to anyone else\". Justify your answer. {2 points} {c} Suppose the utility possibilities frontier for two consumers {Anne and Ben} is represented by the equation U i = lidSUE. where Us and Us stand for the utilities of Anne and Ben respectively. [a] What is the optimal level of Us and Us according to the Rawlsian criterion? {2 points} (b) What is the optimal level of Us and Us according to the utilitarian criterion? [2points} [c] Provide a graphical repmsentation in the {Us ,Ug}spo&. {2 points]