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In a society with two people, A and B, each person initially has a utility level of 2, U=(2,2). Suppose that more can be produced
In a society with two people, A and B, each person initially has a utility level of 2, U=(2,2). Suppose that more can be produced and consumed, which results in either U=(2,4) or U=(2.5, 2.5). i) Explain why there might be an equity-efficiency trade-off. ii) Explain which of these would be preferred by a social planner with Rawlsian preferences and which by a planner with utilitarian preferences, and why they prefer what they prefer
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