The Utilitarian specification of the social welfare function (SWF) generally leads to a higher level of redistribution than the Rawlsian specification of the SWF. True or false? Explain your answer
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The Utilitarian specification of the social welfare function (SWF) generally leads to a
higher level of redistribution than the Rawlsian specification of the SWF. True or
false? Explain your answer
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- Two common specifications of the social welfare function (SWF) are the Utilitarian SWF and the Rawlsian SWF. Compare the two specifications and outline which specification would generally lead to a higher level of redistribution. Explain your answer.Suppose there are two people, Selma and Burak, who must split a fixed income of 200. The marginal utilities of income for Selma and Burak are as follows: MUS = 600- 2*ls MUB = 600- 4*IB where IS and IB are incomes of Selma and Burak respectively. a) What is optimal distribution of income if social welfare function is additive? b) Draw the MUof Selma and Burak in the Edgeworth box and show part (a). c) What is the optimal distribution if society values only the utility of Selma? What is the optimal distribution if society values only the utility of Burak? d) This example refers to ... rationale for income redistribution and it is Pareto ...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
- 9There are three popular types of social welfare functions. Benthamite Social Welfare Function - W (u,, uz, --- Un) = Eu Egalitarian Social Welfare Function - W(u,uz, Un) = E,u-1E(u- min(u)) Rawlsian Social Welfare Function - W(u,, u, .u) = min(u) Select two values of 2 in the Egalitarian Social Welfare Function such that it becomes equivalent to the Benthamite Function and Rawlsian Function respectively. (Note: Make sure that the first value in the option corresponds to Benthamite and second value corresponds to Rawlsian.) ON, 1/N O0, 1 01.0 O0.33, 0.67 O0.67,0.33Suppose there are two possible income distributionsin a society of ten people. In the first distribution,nine people have incomes of $60,000 and one personhas an income of $20,000. In the second distribution,all ten people have incomes of $50,000.a. If the society had the first income distribution,what would be the utilitarian argument forredistributing income?b. Which income distribution would Rawls considermore equitable? Explain.c. Which income distribution would Nozick considermore equitable? Explain.Discuss the first and second fundamental theory of Welfare Economics.
- State the first and second fundamental theorem of welfare economics and outline the fundamental differences in the two theorems.A tariff on an imported good lowers the price in the domestic market and raises the price the domestic producer receives. True False Quotas, unlike tariffs, do not make imported goods more expensive. OTrue False Welfare economics is the study of how the allocation of resources affects economic well-being. OTrue False A consumer's willingness to pay for a good is defined by the slope of the supply curve. True OFalse Equality is the distribution of economic prosperity to only the richest members of society. True False o 11ah-97-3-c318e45d32f9.png?x-oss-process=imaUse the diagram below to answer the question that follows Y₁ X₂ White Collar Household A B C E D Blue Collar Household A movement from point C to point A that results in the smallest loss of efficiency according to the second welfare theorem would be caused by Y Select one: O introducing a tax on a good more often used by blue collar households introducing a flat tax structure introducing a tax on a good more often used by white collar households O introducing an estate (death) tax on the assets of previous generations of white- collar households
- The ‘Rawlsianism’ approach to social welfare improvement is based on a ‘Pareto improvement’ principle. Do you agree? Explain.In social welfare programs, there is no way to change either the benefit reduction rate or the benefit guarantee to simultaneously achieve all three goals of encouraging work, redistributing more income and lowering costs. What is this dilemma called?The theory of distributive justice that I found to be the most convincing was the Utilitarianism theory. In current times there is a large amount of economic inequality. It states in the textbook, "The top 0.1 percent of American families owns 22 percent of the nation’s wealth–exactly the same share as the bottom 90 percent" (Shaw, 2017, p. 85). The Utilitarianism theory believes that there should be a greater equality of income. They believe that if there was a more equal distribution of income, then the happiness of that population would vastly increase. The textbook mentions that countries that have a more equal distribution of income tend to have lower rates of infant mortality, life expectancy, malnutrition, obesity, teenage pregnancy, economic insecurity, personal anxiety, and other measures, in comparison to countries that have a larger income inequality, such as the United States (Shaw, 2017, p. 92). It is even believed that income equality can promote economic growth (Shaw,…
