If society values a more equal distribution of goods which is embodied in Social Indifference Curves, fairness and efficiency are possible. TRUE OR FALSE
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If society values a more equal distribution of goods which is embodied in Social Indifference
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- TRUE OR FALSE Social welfare indifference curves are useful in discussions about the tradeoffs facing society.Tess and Lex earn $40,000 per year and all earnings are spent on consumption (c). Tess and Lex both have the utility function c. Both could experience an adverse event that results in earnings of $0 per year. Tess has a 1% chance of experiencing an adverse event and Lex has a 12% chance of experiencing an adverse event. Tess and Lex are both aware of their risk of an adverse event. Assume the social welfare function is the sum of the Tess’ and Lex’s utility functions. Select the correct statement regarding the explanation for what has happened in the private market and the role of social insurance. a.Adverse section has lead to market failure. The government could improve social welfare by providing full insurance and charging the average of actuarially fair premiums. b.Adverse section has lead to market failure. The government could improve social welfare by providing partial insurance at an actuarially fair premium. c.Moral Hazard has lead to market failure. The government…Explain the concept of the utility possibility frontier. What is the role of the utilitypossibility frontier in the social welfare maximization problem of a welfarist society?
- social preferences are not really preferences, and unselfish behavior is really motivated by the desire to follow rules and conventions with respect to what is fair. Is this interpretation correct?If the social welfare function produces concave social welfare indifference curves, social welfare can be increased by reallocating income between households if their marginal utilities of income differ. TRUE OR FALSEThe social optimum occurs where price is __________ and quantity is __________.
- In the following figure, the optimal choice maximises social value. This occurs where A) MRS > MRT B) MRT > MRS C) MRT = MRS D) There is not enough information to determine optimal point.What assumptions are required for the two fundamental theorems of welfare economics to hold? Are these so strong that the theorems are devoid of practical relevance?Explain why the Second Fundamental Theorem of Welfare Economics implies that there is no intrinsic trade-off between efficiency and interpersonal equity.
- Is Pareto Efficiency enough to explain Welfare economics?Social efficiency requires that, if Q 1 units are bought and sold in a market, then the ____ of Q 1 equals the social marginal cost of Q 1. A. Pareto-efficiency B. social welfare C. social marginal benefit D. social net-gainHow Bergson-Samuelson Social Welfare Function used in a model that considers a society's desire for both Pareto optimality and fairness, Mention all necessary assumptions and specify the conditions that ensure a general equilibrium and social welfare