Adam makes $25,000 per year and Bob makes $45,000 a year, and they both have the same marginal benefit curve. According to the utilitarian view, if a dollar is transferred from Bob to Adam, then
A) Adam's marginal benefit increases by more than Bob's marginal benefit decreases.
B) the change in Adam's marginal benefit plus the change in Bob's marginal benefit equals zero.
C) the change in Adam's marginal benefit plus the change in Bob's marginal benefit is negative.
D) Adam's marginal benefit decreases by more than Bob's marginal benefit increases.

Question

Quizplus · Accepted Answer

Utilitarianism suggests that wealth should be distributed to maximize overall happiness. Since Adam makes less than Bob, the marginal utility (benefit) of a dollar is higher for Adam than for Bob. Therefore, transferring a dollar from Bob to Adam increases overall utility because the increase in Adam's marginal benefit is greater than the decrease in Bob's marginal benefit.

Adam Makes $25,000 Per Year and Bob Makes $45,000 a Year