ECO 201: Principles of Microeconomics Problem Set 6 Due Thursday, October 8 1. Consider the redistribution experiment we did in class on October 6. Of the social welfare functions we have discussed in class, which was used in the experiment? Explain in no more than two sentences. Our group used the Rawlsian function in that we bought the person, or least well off, person a pencil to boost his status relative to the group. We also used utilitarianism by allowing the wealthy person the book for the entire time, he benefited more than we could have benefited as a group by sharing it together for a little time each. 2. Suppose we have three people in a society: Ann, Bayley, and Christopher. Ann’s initial utility is 120, Bayley’s initial utility is 100, and Christopher’s initial utility is 50. Now suppose that the society receives a gift of 6 hedgehogs from a neighboring society. Ann is allergic to hedgehogs, so each hedgehog she receives will reduce her utility by 30.
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This document was uploaded on 11/02/2011 for the course ECO 201 at Miami University.