Question
Hi,
I need answer and explanations for Q3 and Q5. Thanks a lot~!
Suppose that Adam and Eve have identical utility functions that look like the one in the diagram immediately below, rather than the one above. This form of the utility function displays decreasing marginal uti9lity of income constant marginal utility of income increasing marginal utility of income NOTA The tax implied by maximizing the social welfare function W = UAdam + UEve is progressive proportional to income regressive indeterminate The social welfare function advocated by the John Rawls has the form W = UAdam Times UEve W = Minimum (UAdam, UEve) W = UAdam + UEve NOTA Adam has $5 from the sale of his apples and Eve has $9 from honey. They have the identical utility functions shown in the figure below. Adam gets 120 utils from his income Eve gets 250. This form of the utility function displays decreasing marginal utility of income constant marginal utility of income increasing marginal utility of income NOTA Social welfare, W = UAdam + UEve, is maximized at point ba ba x NOTA In general, the income tax system implied by maximizing the social welfare function W = UAdam + UEve is Progressive proportional to income regressive flat
Explanation / Answer
3. b
5.a
