C 1. The Rational Consumer Choicx Get Homework Help With Chegy X 5-50%20Fall%202021%20DF2%20-%20Fundamentals%20of%20Consumer%20Choice%20Theory%209-15 2 / 2 100% + Application of Economic Theory in Public Policy Analysis: The Diminishing Marginal Utility of Income. Some economists have posited (or assumed as a fact) that as we accumulate more income, the satisfaction or utility or happiness we derive from additional (or extra) income will decrease. Hence, the term "diminishing marginal utility of income." Please see Figure 1 below. UTIUTY 310 200 100 & Los INCOME Figure 1 shows that that if the public/government sector takes $10,000 from Person A who is earning $120,000 and transfer that $10,000 to Person B who is making only $10,000, society will be better off because: it Person A's income decreases from $120to 5110, the result is a lot of only 10 units of utility and Persone's income increases from $10K to $20K the result is a benefit of so units of utility First, do you agree that we have such a thing as a diminishing marginal utility of income just like we have a diminishing marginal utility when we consume more of a good or service, e & the marginal utility of your 121 pair of shoes is probably zero or close to zero? Second, in your estimation, at what level of income will the marginal utility of income start to diminish? Do you think other people will agree with you? Why? Finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation? (40 points) C 1. The Rational Consumer Choicx Get Homework Help With Chegy X 5-50%20Fall%202021%20DF2%20-%20Fundamentals%20of%20Consumer%20Choice%20Theory%209-15 2 / 2 100% + Application of Economic Theory in Public Policy Analysis: The Diminishing Marginal Utility of Income. Some economists have posited (or assumed as a fact) that as we accumulate more income, the satisfaction or utility or happiness we derive from additional (or extra) income will decrease. Hence, the term "diminishing marginal utility of income." Please see Figure 1 below. UTIUTY 310 200 100 & Los INCOME Figure 1 shows that that if the public/government sector takes $10,000 from Person A who is earning $120,000 and transfer that $10,000 to Person B who is making only $10,000, society will be better off because: it Person A's income decreases from $120to 5110, the result is a lot of only 10 units of utility and Persone's income increases from $10K to $20K the result is a benefit of so units of utility First, do you agree that we have such a thing as a diminishing marginal utility of income just like we have a diminishing marginal utility when we consume more of a good or service, e & the marginal utility of your 121 pair of shoes is probably zero or close to zero? Second, in your estimation, at what level of income will the marginal utility of income start to diminish? Do you think other people will agree with you? Why? Finally, does the diminishing marginal utility of income provide a sound theoretical basis for redistributive policies like our progressive system of taxation? (40 points)