Economics (6th Edition)
Economics (6th Edition)
6th Edition
ISBN: 9780134105840
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 10, Problem 10.3.6PA
To determine

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Briefly evaluate each of the following statements about utility. A. Each individual pursuing their own utility maximization always leads to total utility in society to be maximized B. When societal efficiency is maximized so is utility C. Dean quits being a highly paid lawyer($300,000) and instead becomes a worker for a nonprofit providing bed-nets in regions affected by malaria making $30,000. What effect is this expected to have on: economic efficiency, Dean’s utility, and worldwide utility. (no need to explain simply state up, down, same, or uncertain)
In an article on how exercise improves health, the New York Times reported on an observational study that found that each hour spent running added two hours to a person's life expectancy [Brody. 20061 A week later, a letter to the editor questioned whether the results really proved anything about the impact of exercise on health, and suggested that the study could just as well be showing that "those with a strong heart and good health are otherwise more likely to enjoy running and do it more regularly." How does this challenge to the exercise study relate to the problems faced by economists trying to &slims the causal effects of economic policy? How could you design an experimental study to estimate the impact of running on life expectancy?  
Anon is a graduate student at Lock Haven University studying human behavior. Three subjects, Felicity, Terrance, and Lola, listed their utility for pineapple and watermelon. Anon believes he will be able to tell which subject likes pineapple the most by referring to the levels of utility each one reported. His adviser, Dr. Util, tells him his research is flawed. Explain why Dr. Util feels this way.
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