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Suppose society consists of two individuals, A and B, who must split a fixed income of $150. Individual A's marginal utility of income is given by MUA-400-IA and individual B's marginal utility of income is given by MUB-600-61n. Suppose the social welfare function is W=UA+UB. What if the social welfare function is, instead, W=min(Ua,UB). 44. Then equity in the distribution of income would be synonymous with equality of

Suppose society consists of two individuals, A and B, who must split a fixed income of $150. Individual A's marginal utility of income is given by MUA-400-IA and individual B's marginal utility of income is given by MUB-600-61n. Suppose the social welfare function is W=UA+UB. What if the social welfare function is, instead, W=min(Ua,UB). 44. Then equity in the distribution of income would be synonymous with equality of

Economics:
Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter33: Income, Income Distribution, And Poverty
Section: Chapter Questions
Problem 10E
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Suppose society consists of two individuals, A and B, who must split a fixed income of $150. Individual A's marginal utility of income is given by MUA=400-IA and individual B's marginal utility of income is given by MUB=600-6IB. Suppose the social welfare function is W=UA+UB. What if the social welfare function is, instead, W=min(UA,UB). 44. Then equity in the distribution of income would be synonymous with equality of What if the social welfare function is, instead, W=UA+2.6UB and individual B's marginal utility is, instead, MUB=200-IB. 45. What is the optimal distribution of income to individual A? $ 46. What is the optimal distribution of income to individual B? $ 47. Equity in the distribution of income would be synonymous with equality of
Transcribed Image Text:Suppose society consists of two individuals, A and B, who must split a fixed income of $150. Individual A's marginal utility of income is given by MUA=400-IA and individual B's marginal utility of income is given by MUB=600-6IB. Suppose the social welfare function is W=UA+UB. What if the social welfare function is, instead, W=min(UA,UB). 44. Then equity in the distribution of income would be synonymous with equality of What if the social welfare function is, instead, W=UA+2.6UB and individual B's marginal utility is, instead, MUB=200-IB. 45. What is the optimal distribution of income to individual A? $ 46. What is the optimal distribution of income to individual B? $ 47. Equity in the distribution of income would be synonymous with equality of
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