3- As a result of the tradeoff between income equality and incentives to work, what do we know about an optimal redistribution policy?

a. It can never be funded through taxes on wage income.

b. It must always achieve a full egalitarian society.

c. It is only consistent with transfers to the middle class.

d. It always falls short of achieving a full egalitarian society.

4- Suppose that income is assumed to have increasing marginal utility. From a utilitarian perspective, what can be concluded?

a. Some income redistribution from rich to poor would increase social welfare.

b. Some income redistribution from poor to rich would increase social welfare.

c. Any income redistribution would probably reduce social welfare.

d. Any income redistribution would probably increase social welfare