The Table Below Reflects the Levels of Total Utility Received

question 211

Essay

The table below reflects the levels of total utility received from income for each of four members of a society.
a.Assume that the society has the following income distribution:
Peter $3
Paul $7
Mary $5
Jane $3
Is it possible for the government to increase total aggregate utility by redistributing income among members of society? Explain your answer.
b.Assume that the government has $19 to allocate among the four members of society. (Assume that no one has any income to start with.) If the government is interested in distributing income in a way that maximizes aggregate total utility, how should it distribute the $19 of income?
c.Does the table above describe a situation characterized by diminishing marginal utility? Explain your answer.

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Definitions:

Pancreatic Lipase

An enzyme that digests lipids.

Lipids

A group of naturally occurring molecules that include fats, waxes, and certain vitamins, essential for energy storage and cell membrane structure.

Vitamin A

A fat-soluble vitamin important for normal vision, immune function, and reproduction.

Bones

The hard, dense organs that form the framework of the human body, essential for movement, protection of internal organs, and storage of minerals.