The overall well-being score for Yulhee (income $25,000) is 4.6, and the well-being score for Pancho (income $120,000) is 8.2. Across the two of them, total well-being is 12.8. The change in well-being for a $5,000 change in income for Yulhee is .4 and for Pancho is .2. What net change in total well-being will occur if $5,000 of Pancho's income is taken as tax and transferred to Yulhee through an income transfer?
A) Total well-being will fall to 12.6 for a net loss of .2.
B) Total well-being will remain constant at 12.8, but how it is distributed across Yulhee and Pancho will change.
C) Total well-being will rise to 13.0 for a net gain of .2.
D) Total well-being will rise to 13.2 for a net gain of .6.
Correct Answer:
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