An accident occured and an individual loses a leg. It lowers the individual's utility at each level of income but increases his/her marginal utility.
1. Show diagrammatically the utility functions before and after the accident.
2. Show that if you were the Utilitarian, you would give more income to the individual after the accident, but that even after the transfer, the individual who had the accident is worse off than before.
3. Show the compensation that a rawlsian would provide.
4. Is it possible for a utilitarian to give more to the individual who had the accident than a Rawlsian?
5. Under what circumstances would a utilitarian give nothing to an individual who had experienced an accident? Please explain most of figure with TU(legged) on one axis and TU(legless) on the other