Anika, Pari, Amy, and Anna Are College Roommates Living Off

question 93

Essay

Anika, Pari, Amy, and Anna are college roommates living off campus. All four of them have a utility function given by U = Y^0.5, where Y is income per day. Suppose that Anika earns $8 per day, Pari earns $81, Amy earns $49, and Anna earns $16. What happens to the value of the utilitarian social welfare function if $17 is taken from Pari and given to Anika?

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Definitions:

White Knight

A person or company making a favorable investment in or purchase of a company as a strategic defense against a hostile takeover.

Tender Offer

A public, open offer or invitation by a prospective acquirer to all shareholders of a publicly traded corporation to tender their stock for sale at a specific price during a certain time.

Hostile Takeover

An acquisition attempt by one company of another that is resisted by the target company's management and board of directors.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with the care of money or property.