Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 20 - Part VI - Income Inequality and Poverty - Problems and Applications - Page 431: 6

Answer

a) The utilitarian argument would be that there is diminishing marginal utility for the nine people with incomes of 30 thousand dollars (and increasing utility for the person with an income of 10 thousand dollars). Additionally, the total utility would increase for the society.

Work Step by Step

b) Rawls would prefer the second distribution since there is more equality than in the first distribution. c) Nozick would prefer the first distribution since he is not as much concerned about the distribution than he is about the fairness of the opportunity to have a larger income.
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