Please help me answer these question. Thank you (: Consider the following social

Question

Please help me answer these question. Thank you (:

Consider the following social welfare function for a small community of five people.

where:

N= noncompetitive goods

C = competitive goods

P= pollution

a,b,c,d,e = people

|a= all people besides a

1. Place positive and negative signs above all the terms in the function, illustrating whether they increase or decrease each person's utility.

2. Assume that producing all types of goods (both N and C) requires some level of pollution. Will an increase in the consumtion of non-competitive goods always increase social welfare.

Please help me answer these question. Thank you (: Consider the following social welfare function for a small community of five people. where: N= noncompetitive goods C = competitive goods P= pollution a,b,c,d,e = people |a= all people besides a 1. Place positive and negative signs above all the terms in the function, illustrating whether they increase or decrease each person's utility. 2. Assume that producing all types of goods (both N and C) requires some level of pollution. Will an increase in the consumtion of non-competitive goods always increase social welfare.

Explanation / Answer

1. Non competitive goods - Positive

Competitive goods by self - Positive

Competitive goods by others - Negative

Pollution - Negative

2. Consumption of non competitive goods will increase the particular consumer's utility and will not affect others' utility. However, if the decrease in social welfare due to the pollution caused is greater in magnitude than the increase in the utility of the consumer, social welfare will decrease. Hence it is not necessarily true that social welfare will increase in this case.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.