Table 21-2
Total Utility Derived from Various Income Levels Table 21-2 Reflects the Levels of Total Utility Received from

question 29

Essay

Table 21-2
Total utility derived from various income levels
$$\begin{array} { | l | l | l | l | l | } \hline \text { Income } & \text { Peter } & \text { Paul } & \text { Mary } & \text { Jane } \\\hline \$ 1 & 15 & 32 & 20 & 16 \\\hline \$ 2 & 29 & 61 & 38 & 30 \\\hline \$ 3 & 42 & 87 & 54 & 42 \\\hline \$ 4 & 54 & 110 & 68 & 52 \\\hline \$ 5 & 65 & 130 & 80 & 60 \\\hline \$ 6 & 75 & 147 & 90 & 66 \\\hline 77 & 84 & 161 & 98 & 70 \\\hline \$ 8 & 92 & 172 & 103 & 72 \\\hline\end{array}$$
Table 21-2 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 maximises aggregate total utility, how should it distribute the $19 of income?
c.Does Table 21-2 describe a situation characterised by diminishing marginal utility? Explain your answer.

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