Consider three individuals with utility indicators UA = MA, UB = nMB, and UC = MC d. Explain the answers to parts a through c in terms of the comparability of utility.

Utility function is a mathematical representation used in economics to quantify the options of an…

a. Show that there are values of v and y that can generate any social ordering of the income allocations a = (5,2,5), b = (4.6, 1), and c = (3.4.8) when evaluated by the social welfare function W= UA+UB + UC. b. Assume instead that U₁ =+yMA, UB =+7MB, and UC=0+7MC. Show that the evaluation via the utilitarian social welfare function is unaffected by the choices of v and y.

a. Show that there are values of v and y that can generate any social ordering of the income allocations a = (5,2,5), b = (4.6, 1), and c = (3.4.8) when evaluated by the social welfare function W= UA+UB + UC. b. Assume instead that U₁ =+yMA, UB =+7MB, and UC=0+7MC. Show that the evaluation via the utilitarian social welfare function is unaffected by the choices of v and y.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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