Suppose the marginal utility of a dollar for Carl is 7 utils and for Judy, 12 utils. According to Lerner, society will maximize its total utility if
a. we transfer money from Carl and give it to Judy as long as the marginal utility of money for Carl is lower than that of Judy's
b. we transfer money from Carl and give it to Judy as long as the marginal utility of money for Carl is higher than Judy's
c. we transfer money from Judy and give it to Carl as long as the marginal utility of money for Judy is lower than Judy's
d. we allow the market to determine the marginal utilities of Carl and Judy regardless of whose is higher
e. Carl and Judy have the same utility functions
A
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a. True b. False Indicate whether the statement is true or false
If an indifference curve is bowed out away from the origin, the marginal rate of substitution is
a. not likely to reflect the relative value of goods. b. likely to be constant for all bundles along the indifference curve. c. likely to be identical to the price ratio for each bundle along the indifference curve. d. different for each bundle along the indifference curve.