3(b)Consider the following social choice problem in the setting of consumption of two goods by two consumers. The two goods are called tillip and quillip and the two consumers are called 1 and 2. Consumer 1 has utility function U, (t,q) = 6+4 In(t) +.6 In(q) (where t is the amount of tillip 1 consumes and q is the amount of quillip). Consumer 2 has utility function U₂ (t,q) = 8+ In (t) + In(a). The social endowment consists of 15 units of tillip and 20 units of quillip. a. Suppose that a social dictator has social welfare functional of the following form: social welfare, as a function of (u',u) is a weighted sum with weight 2 on the lesser of u' and u² and weight 1 on the greater of the two. What will be the welfare optimum plan chosen by this social planner? b. What is the set of all feasible, Pareto efficient allocations of the consumption good for this society?

3(b)Consider the following social choice problem in the setting of consumption of two goods by two consumers. The two goods are called tillip and quillip and the two consumers are called 1 and 2. Consumer 1 has utility function U, (t,q) = 6+4 In(t) +.6 In(q) (where t is the amount of tillip 1 consumes and q is the amount of quillip). Consumer 2 has utility function U₂ (t,q) = 8+ In (t) + In(a). The social endowment consists of 15 units of tillip and 20 units of quillip. a. Suppose that a social dictator has social welfare functional of the following form: social welfare, as a function of (u',u) is a weighted sum with weight 2 on the lesser of u' and u² and weight 1 on the greater of the two. What will be the welfare optimum plan chosen by this social planner? b. What is the set of all feasible, Pareto efficient allocations of the consumption good for this society?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A, B, C