Question

a. A tiny fishing village has 3 residents. Ann has a utility of 10, Bruce has a utility of 6, and Charlie has a utility of 7. If the mayor uses a Rawlsian social welfare function, the social welfare of this tiny village would be

Select one alternative

• 420
• 18.3
• 6
• 23
• 10

b. A mountain village owns a common pasture where villagers graze their goats. The cost to a goat owner of owning and caring for a goat is 4 EUR. The pasture gets overgrazed if too many goats share the pasture. The total revenue from all goats on the common pasture is f (g) = 48g - 2g², where g is the number of goats on the pasture. The town council notices that total profit from the pasture is not maximized if villagers are allowed to pasture goats for free. The council decides to allow a goat to use the common pasture only if its owner buys it a goat license. To maximize total profit (of villagers and council), how many EUR per goat should the council charge?

Select one alternative

• 22
• 12
• 26
• 24
• 20

Answer 1

Question:- A tiny fishing village has 3 residents. Ann has a utility of 10, Bruce has a utility of 6, and Charlie has a utility of 7. If the mayor uses a Rawlsian social welfare function, the social welfare of this tiny village would be

Ans:-  The social welfare of tiny village would be 6

Explanation:- According to Rawlsian social welfare function, the level of utility is maximized with the minimum utility present in the society.

So, accordingly

Why other options are wrong:-

Since we have calculated with Rawlsian social welfare function, the maximum level of utility is 6 therefore other options are incorrect.