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Marshas utility is UM and her income is YM . Sherrys utility is US and her income is YS. Suppose it is the case that;
Marshas utility is UM and her income is YM . Sherrys utility is US and her income is YS. Suppose it is the case that; UM=100YM1/2+0.8US, and US=100YS1/2. Suppose that initially Marsha and Sherry both have incomes of 100. By taxation and subsidy, 36 is taken away from Marsha and given to Sherry. Assuming that the social welfare function is additive. Is this redistribution a Pareto efficient redistribution? Define Pareto efficient redistribution first and then answer.
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