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brony2199
brony2199
07.11.2019 • 
Business

Suppose there are only two people, simon and charity, who must split a fixed income of $100. for simon, the marginal utility of income is 400 2ssmui  whereas for charity the marginal utility of income is 400 6ccmui  where si and ci are the amounts of income for simon and charity, respectively. a. [5 points] what is the optimal distribution of income if the social welfare function is additive? b. [5 points] what is the optimal distribution if society values only the utility of charity? what if the reverse is true? comment on your answers. c. [5 points] finally, comment on how your answers change if the marginal utility of income for both simon and charity is constant: 400scmu mu.

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