Question
Suppose that Tang and Wilson must spilt a fixed 400 pounds of food between them. Tang's utility function is UT =F1and Wilson's utility function is
Suppose that Tang and Wilson must spilt a fixed 400 pounds of food between them. Tang's utility function is UT =F1and Wilson's utility function is Uw =1/2F2 , where F1 and F2 are pounds of food to Tang and Wilson, respectively.
How much utility will Tang and Wilson receive if the food is distributed evenly between them? If the food is evenly distributed between Tang and Wilson, Tang will have 14.14 units of utility and Wilson will have 7.07 units of utility.
If the social welfare function is UT and Uw, then what distribution of food between Tang and Wilson maximizes social welfare?
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