Question

In: Economics

Consider the following social welfare function: SW=Ua(Xnca, Xca, Xc~a, Pa)+Ub(Xncb, Xcb, Xc~b, Pb)+ Ud(Xncd, Xcd, Xc~d,...

Consider the following social welfare function:

SW=Ua(Xnca, Xca, Xc~a, Pa)+Ub(Xncb, Xcb, Xc~b, Pb)+ Ud(Xncd, Xcd, Xc~d, Pd)+...

where: X=consumption bundle, P=pollution, nc=non-competitive consumption, c=competitive consumption, a, b, d = people, ~a, ~b, ~d = all other people besides a, b, d.

1. Place positive and negative signs above all the terms in the function, illustrating whether they increase or decrease each individual’s utility.

Solutions

Expert Solution

Explanation:-

Please find attached the image which contains solution for both the parts (1);

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Rahul Sunny answered 1 year ago
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