An economy consists of two individuals, Lynne and Jonathan, whose utility levels are given by (U_{L}) and
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An economy consists of two individuals, Lynne and Jonathan, whose utility levels are given by \(U_{L}\) and \(U_{J}\), respectively.
a. Suppose that the social welfare function is
\[ W=U_{L}+U_{J} \]
True or false: Society is indifferent between giving a dollar to Lynne and a dollar to Jonathan.
b. Now suppose that, instead, the social welfare function is
\[ W=U_{L}+8 U_{J} \]
True or false: Society values Jonathan's happiness more than Lynne's.
c. Now suppose that, instead, the social welfare function is
\[ W=\min \left[U_{L}, U_{\lambda}\right] \]
True or false: In this society, the optimal distribution of income is complete equality.
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