Ola has utility function given by $u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)$ and Gina has a utility function given by $u_{G}\left(w_{G}\right)$. Ola is altruistic if which of the following is true? A) $\frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial w_{O}} \geq 0$ B) $\frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial w_{O}}0$ D) $\quad \frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial u_{G}\left(w_{G}\right)} \geq 0$

Question

Ola has utility function given by $u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)$ and Gina has a utility function given by $u_{G}\left(w_{G}\right)$. Ola is altruistic if which of the following is true?
A) $\frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial w_{O}} \geq 0$
B) $\frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial w_{O}}<0$
C) $\frac{\partial u_{G}\left(w_{G}\right)}{\partial w_{G}}>0$
D) $\quad \frac{\partial u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)}{\partial u_{G}\left(w_{G}\right)} \geq 0$

Quizplus · Accepted Answer

Ola is altruistic if her utility increases with Gina's utility, which is represented by the partial derivative of Ola's utility with respect to Gina's utility being non-negative.

Ola Has Utility Function Given By uO(wO,uG(wG))u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)uO​(wO​,uG​(wG​)) And Gina Has a Utility Function Given By

Ola Has Utility Function Given By $u_{O}\left(w_{O}, u_{G}\left(w_{G}\right)\right)$ And Gina Has a Utility Function Given By