Question

Economic experiments have found that individuals prefer an outcome where no one is made better off...

Economic experiments have found that individuals prefer an outcome where no one is made better off to an outcome where the welfare of only some is improved if that improvement in welfare is unequally distributed. Why do you think this is so?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

This is related to the principle of Pareto efficiency. A Pareto efficient outcome is one where someone can be made better off without making anybody worse off. When only welfare of only some is improved if that improvement in welfare is unequally distributed, the outcome is not Pareto efficient and those who are worse off would hope for better outcomes. In general people value losses more than gains. For those who are not benefitting, there will be losses as they see people around them gain. The value fo their losses will outweigh the value of the gains of others, and on average people dislike such experiments. They would rather prefer an experiment where no one is made better off as it atleast ensures an equal playing ground rather than risking inequality.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Economic __________________ is a state in which no one can be made better off without making...
Economic __________________ is a state in which no one can be made better off without making someone else worse off. Increased output cannot be achieved without first increasing the quantity or quality of inputs. Wordbank: ["Absolute Advantage", "Adam Smith", "Capital", "Capitalism", "Ceteris Paribus", "Circular Flow", "Communism", "Comparative Advantage", "Competitive", "Economic Efficiency", "Economic Equity", "Economic Growth", "Economic Security", "Economics", "Economy", "Efficiency", "Entrepreneurship", "Imperfect", "Industry", "Keynes", "Marx", "Labor", "Land", "Law of Diminishing Marginal Utility", "Law of Diminishing Returns", "Law of Increasing Costs",...
A physician wants to perform a study at a local health center where 250 individuals have...
A physician wants to perform a study at a local health center where 250 individuals have stress issues. The purpose of the study would be to determine if doing yoga for 30 minutes helps with improving stress levels compared to sleeping for 30 minutes. Part A: Describe an appropriate design for the study. (5 points) Part B: The hypotheses for this study are as follows: H0: There is no difference in the mean improvement of stress levels for either treatment....
DISCUSSION- PRODUCTION THEORY First, the idea that firms (and individuals) should make decisions on how they...
DISCUSSION- PRODUCTION THEORY First, the idea that firms (and individuals) should make decisions on how they optimize "on the margin" (where MC=MR). Often people get confused and think about making decisions based on the average (such as average total cost). Average total cost includes FIXED costs, which are sunk and should not influence future decisions. Second, the idea of diminishing marginal returns. That's the idea that each additional unit provides less benefit than the previous unit consumed. Use these concepts...
: Do you think individuals or firms have the right to hold patents without producing any...
: Do you think individuals or firms have the right to hold patents without producing any useful products of their own? Why or why not?. What are the differences between utility patents and design patents? Provide examples of each (at least one example must be from your “outside” research). Which type of patent would you prefer to apply for and obtain- why? What are the effects of patent trolls on startups? How would you protect your startup against patent trolls?
1. In class, we found that the only Nash equilibrium outcome of the homogeneous goods Bertrand...
1. In class, we found that the only Nash equilibrium outcome of the homogeneous goods Bertrand duopoly model was p1 = p2 = MC. We then noted that if we changed some of the assumptions this result would no longer hold. Explain one assumption which will alter this result such that two firms competing on prices will have market power? 2. What is the Herfindahl-Hirschman Index (HHI)? You must provide the formula for full credit. Would the Competition Bureau be...
Imagine a neighborhood where coyotes are sometimes seen. The are found rarely eating chickens and cats...
Imagine a neighborhood where coyotes are sometimes seen. The are found rarely eating chickens and cats left outside. Some of the neighbors have taken to putting out poison to try to kill the coyotes. A recent article in the neighborhood association newsletter said killing one or two coyotes will not impact the population since “they have a compensatory, density-dependant breeding rate” which they claim means that the more coyotes that are killed the more they reproduce. Given what is known...
You have been hired by the Coca-Cola Company to determine if students at University prefer Coke...
You have been hired by the Coca-Cola Company to determine if students at University prefer Coke or Pepsi. A taste test was performed where students were given two identical cups and were asked to taste both drinks. They had to report which drink they prefer. It was found that 69 out of 125 students indicated they preferred cup that contained Coke. 1. (4 pts) What is the random variable in this problem? Does the random variable have a binomial distribution?...
Imagine that an alien species visits earth and wants to perform experiments. They are nice enough...
Imagine that an alien species visits earth and wants to perform experiments. They are nice enough to give you a choice as to what modifications they will make...the question The alien species has decided that they want use a ray gun on you that will duplicate or remove one of the 23 types of chromosomes in all of your body cells. You get to choose which chromosome is affected (choose the the one that would impact your life the least)....
In a newly published article in the scientific journal “International Economic Review”, some authors study how...
In a newly published article in the scientific journal “International Economic Review”, some authors study how carbon taxation could help reducing the climate change problem. They find that: Carbon taxation is mostly studied in social planner or infinitely‐lived‐agent models, which obscure carbon taxation's potential to produce a generational win win. This paper's large‐scale, dynamic 55‐period, overlapping generations model calculates the carbon‐tax policy delivering the highest uniform welfare gain to all current and future generations. Our model features coal, oil, and...
You have just made an informational presentation to a group of enrollees in your new benefits...
You have just made an informational presentation to a group of enrollees in your new benefits program. You represent the insurance company and will only be at this location for two days. One of the enrollees approaches you and starts to critique your presentation. You aren`t sure how to react. As you are formulating a response, he starts to cry. Describe what you think might have triggered his initial critical reaction. Why do you think he started to cry? Describe...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT