Problem Set 3

Question 1

if both utilities provide postiively to social welfare, how does this affect indiff curve?

Answer 1

It mus tbe downward sloping (utility increase of one must be lowered to keep welfare constant)

Question 2

how to do lorenz curve

Answer 2

rank lowest to highest
cumulative % of pop

Question 3

backhouse et al 2022 on welfarist approach

Answer 3

The authors define welfarism in several ways, focusing on different aspects or interpretations by different thinkers (notably the interpretation of Amartya Sen). The most pertinent here is that welfarism is the claim that social welfare depends only on the welfare of the individuals in the society being considered. Welfarism thus focuses on subjective, ordinal, individual utilities, which is exactly what 𝑊 = 𝑓(𝑈𝐴,𝑈𝐵) focuses on in this question.

Question 4

Backhouse et al (2020) on non-welfarist approach

Answer 4

In contrast, the non-welfarist approach emphasises the importance of issues such as fairness, equity, solidarity, freedom etc. for their own sake. They argue these are intrinsically important for society and should not be ignored just because they don’t directly impact income or consumption. Non-welfarists would argue that it does matter if the social optimum is imposed by a dictato

Question 5

Answer 5

Quasi-linear lead to linear UPF, concave when going from 20 to 10 (from origin to straight line)

Question 6

tips to help sketch UPF from contract curve

Answer 6

Contract curve has unique points on the UPF but non-contract curve points do not

Calculate Utility on contract curve key points