Wednesday
July 30, 2014

Homework Help: Economics

Posted by Sarah on Thursday, March 8, 2007 at 6:55pm.

7. Suppose there are two possible income distributions in a society of ten people. In the first distribution, nine people have incomes of $30,000 and one person has an income of $10,000. In the second distribution, all ten people have incomes of $25,000.
a. If the society had the first income distribution, what would be the utilitarian argument for redistributing income?
The nine individuals have a higher utility than the one individual with the income of $10,000. So if for example a dollar was taken from the rich and given to the poor the utility of society as a whole would increase. This is because the poor person would have a higher utility from the dollar gained than the fall in utility from the rich people.

b. Which income distribution would Rawls consider more equitable? Explain.
I would think that the second distribution would be more equitable since Rawls would want equality.
c. Which income distribution would Nozick consider more equitable? Explain.

I would think that Nozick would consider the first distribution more equitable. Since Nozick would want individuals to a fair playing field but not concerned about the resulting distribution of income. So the second distribution of income is equal so the only option left is the first one.

What is your question regarding this situation?

I would like to know if my responses for each of the 3 questions is correct.

Your bottom line answers for Utilitarians and Rawls are correct. However, both views have exceptions which you should note in your final answer.

Nozick, on the other hand, is not bothered by income inequality as long as the process for generating the distribution is "fair." So, Nozick would not "prefer" either distribution. However, he would not advocate a redistribution process that moves from distribution a to distribution b.

Bottom line. your are on the right track; but your arguments need to be much more fully developed; certainly more than a single sentence for each.

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