Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 11, Problem 1DQ
To determine
The fairness of the given situation.
Expert Solution & Answer
Explanation of Solution
In the given situation, both the proposals are not fair for poor people. Such people have less discretionary income and may cut back the usage more than the other people. The group of people who are unfairly harmed are those who use large quantities of water or electricity and they face difficulty in cutting back. In fact, questions related with fairness are much difficult to answer by the economists. The criteria for efficiency are objective, but the criteria for fairness are subjective. Thus, the better way to do is to explain the criteria clearly.
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Chapter 11 Solutions
Economics: Principles & Policy
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