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Microeconomics / Utility & Behavioral Economics

1. If you were to take $1 from a rich person and gave it to a poor person, the rich person looses less utility than the poor person gains. Would you agree or disagree, and why?

2. Please provide an example of personal transportation choices (1) for short distances (less than 400 miles) and longer distances (in excess of 800 miles) with regards to the utility values they provide, and the individual product costs. If you choose a transportation source other than airplanes for short distances, why would you select that choice and what utility do you receive. What utility are you looking for id and when you use commercial aircraft for longer distances?

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Answer 1:
I will tend to agree with this statement. Generally speaking, $1 will have a much lower utility for a rich person than it will have for a poor person. This is because rich person has a lot more money and thus does not associate a lot of utility with just $1. Thus by giving money to the poor person, the rich person is actually loosing ...

Solution Summary

The solution answers 2 questions related to Microeconomics / Utility & Behavioral Economics