Question

Before a policy is proposed, Sam has $200,000 and Nick has $34,000. Which of the following policies would satisfy the maxi-min principle?

Please provide detail explanation, not in your handwriting coz i might not be able to recognize it

a. Policy A that benefits Sam by $20,000 and benefits Nick by $1,000, for the aggregate benefits of $21,000

b. Policy B that benefits Sam by $200,000 and lowers Nick’s benefits by $1,000, for the aggregate benefits of $199,000

c. Policy C that lowers Sam’s benefits by $1,000 and lowers Nick’s benefits by $1,000, for the aggregate benefits of negative $2,000

d. None of the above policies would satisfy the maxi-min principle

Answer 1

Answer is option A)

Maxi min principle is a justice criterion proposed by John Rawls, which says that a policy should be designed such that maximizes the benefit of the worst off individual.

Thus any policy that increases Nick benefits is selected

So in policy a ) total utility ( in terms of income ) of Sam is 35000$

Thus Nick had minimum utility before policy change, & now his utility has been increased , so satisfy the principle

Option b) Nick is worse off, new utility is lower than the original one

Option c) again Nick worse off.