A government is considering two proposals to distribute a budget surplus. Proposal 1 gives a one-time payment of $1,000 to every citizen, regardless of their income. Proposal 2 gives a one-time payment of $1,000 only to citizens in the lowest 20% of income earners.
Statement: Assuming that the additional happiness a person gets from an extra dollar is greater when their income is lower, Proposal 1 would generate more total additional happiness across the entire population than Proposal 2.
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Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
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Evaluating Tax Policy Effectiveness
A government is considering two proposals to distribute a budget surplus. Proposal 1 gives a one-time payment of $1,000 to every citizen, regardless of their income. Proposal 2 gives a one-time payment of $1,000 only to citizens in the lowest 20% of income earners.
Statement: Assuming that the additional happiness a person gets from an extra dollar is greater when their income is lower, Proposal 1 would generate more total additional happiness across the entire population than Proposal 2.
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