Considering the given possible uses of candy, which of the four choices could be Pareto Efficient (assuming candy is a “good”)?Among the four choices, which policy would yield the highest value according to a “Rawlsian” welfare function? (assuming that sweet/candy is a “good”) Explain.CHOICE 1: Every student gets one candy. The remaining candies are thrown in the bin.CHOICE 2: One student gets all the candiesCHOICE 3: Every student gets two candies except for one student, who gets no candy; the remaining go in the bin.CHOICE 4: All the candies go in the bin

These are concepts of Welfare economics that have been discussed as follows:

Answered: Considering the given possible uses of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Considering the given possible uses of candy, which of the four choices could be Pareto Efficient (assuming candy is a “good”)?
Among the four choices, which policy would yield the highest value according to a “Rawlsian” welfare function? (assuming that sweet/candy is a “good”) Explain.

CHOICE 1: Every student gets one candy. The remaining candies are thrown in the bin.

CHOICE 2: One student gets all the candies

CHOICE 3: Every student gets two candies except for one student, who gets no candy; the remaining go in the bin.

CHOICE 4: All the candies go in the bin

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