ps 2 - Homework Assignment#2 Energy Economics 324 Due...

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Homework Assignment #2: Energy Economics 324 Due: Friday, February 12 This assignment may be turned in as a group assignment. Up to a maximum of 5 names may be placed on the final paper turned in on Tuesday. For this assignment, and this assignment only , each student is not required to turn in a independently written assignment. You are allowed to choose your own group of up to 5 people or work independently. Each person in the group will receive the same grade on the assignment. 1. Consider an economic program that affects people of different income levels as follows: Income before Income after program program Poorest 20% : $ 12,338 $ 11,674 Next 20% : $ 30,295 $ 29,594 Next 20% : $ 50,709 $ 49,591 Next 20% : $ 78,922 $ 78,495 Richest 20% : $168,302 $172,941 a. Does this program satisfy the Kaldor-Hicks Potential Pareto Criterion? b. Assume that it in order to transfer money from the wealthy to the poor costs 20% of the total amount transferred. Would this program satisfy the Full Compensation Criterion? c. Does full compensation seem to be a reasonable public policy in this case? d. Does this program satisfy the Willig/Bailey test?
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This note was uploaded on 05/04/2010 for the course EDUC 22331 taught by Professor Feev during the Spring '10 term at The School of the Art Institute of Chicago.

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ps 2 - Homework Assignment#2 Energy Economics 324 Due...

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