(2) (3) MO L U APRIICU LLWUIIUITTND WINVEI LY Wi v Ivea Income Redistribution 1: Suppose the government is to take $10K away from Emma and give it to Emily. Use data in the table to answer the questions below. (i) Given Column 6, what would be the change in Emily's level of happiness when her income is increased from $10K to $20K? Answer: 0 (If the change is negative, include a minus sign) (ii) Given Column 3, what would be the change in Emma's level of happiness when her income is decreased from 5110K to S100K? Answer: Q (If the change is negative, include a minus sign) (iii) What would be the net change in the society's total level of happiness by changing income levels from (Emily, Emma) = ($10K, $110K) to (Emily, Emma) = (520K, $100K)? Answer: 0 (If the change is negative, include a minus sign) Income Redistribution 2: Suppose the government is to take another $10K away from Emma and give it to Emily. (i) Given Column 6, what would be the change in Emily's level of happiness when her income is increased from $20K to $30K? Answer: 0 (If the net change is negative, include a minus sign) (ii) Given Column 3, what would be the change in Emma's level of happiness when her income is decreased from $100K to $90K? Answer: Q (If the net change is negative, include a minus sign) (iii) What would be the net change in the society's total level of happiness by changing income levels from (Emily, Emma) = ($20K, $100K) to (Emily, Emma) = ($30K, $90K)? Answer: Q (If the net change is negative, include a minus sign) (1) Dept. of Applied Economics - University of Minnesota (i) Compute the marginal happiness (in units of Q) as Emily and Emma move from one income level to the next income level. Fill in the white blanks in Columns 3 and 6. (if) Given the values in Columns 3 and 6, is mariginal happiness: (A) an increasing function of income, or (B) a decreasing function of income? Answer: (iii) What is the theory depicting the observed phenonomon in (ii)? Answer (first letter provided): The Law of D u of 1 (iv) Given their current incomes of (Emily, Emma) = ($110K, $10K), what is the total level of happiness that Emily and Emma attain