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(15 pts) Assume there is an community with 8 households and income distribution (1, 4, 5, 8, 10, 12, 15, 17). Let us call this

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(15 pts) Assume there is an community with 8 households and income distribution (1, 4, 5, 8, 10, 12, 15, 17). Let us call this community, group 1. (b) If government takes one unit of income from each of the three richest consumers and gives one unit to each of the three poorest, plot the Lorenz curve again. How the inequality has changed? Explain. (3 pm) ((1) Oicials in organization A use the social welfare function, W = 23:1 1'}, and in organization B use the social welfare function, W = 22:1((log(Yh2)) / 2) to compare the welfare of groups 1 and 2. Then, they assign a nancial support package to the group with the lower degree of social welfare. Which group receives the support from or- ganization A? Which group receives support from organization B? Why? (4 pts)

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