4. What is the optimal income distribution between two citizens under these three assumptions: -The Social Welfare Function is Utilitarian. - The total income is fixed. - The two citizens have the same individual utility function, which exhibits decreasing but positive marginal utility of income.

4. What is the optimal income distribution between two citizens under these three assumptions: -The Social Welfare Function is Utilitarian. - The total income is fixed. - The two citizens have the same individual utility function, which exhibits decreasing but positive marginal utility of income.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

4. What is the optimal income distribution between two
citizens under these three assumptions:
-The Social Welfare Function is Utilitarian. -
The total income is fixed. -
The two citizens have the same individual utility
function,
which exhibits decreasing but positive marginal utility
of income.

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