Critical Reasoning — Implicit Assumptions Statement: “Equality of income throughout a community is the essential condition for maximising the total utility which the total income available could confer on the members of that community.” Assumptions to test: I. If extra income were taken from the rich and given to the poor, the total utility experienced by the community would increase. II. Equal pay for equal work.
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AOnly assumption I is implicit
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BOnly assumption II is implicit
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CEither I or II is implicit
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DNeither I nor II is implicit
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EBoth I and II are implicit
Answer
Correct Answer: Only assumption I is implicit
Explanation
Introduction / Context:This question evaluates your understanding of implicit assumptions in economic statements about utility and income distribution. The statement claims that perfectly equal income maximizes total utility across a community. We must identify which hidden beliefs must be true for that claim to hold meaningfully.
Given Data / Assumptions:
- Main claim: equality of income is essential for maximizing total utility.
- Assumption I: transferring income from richer to poorer increases aggregate utility.
- Assumption II: equal pay for equal work (a labor-compensation norm unrelated to total utility per se).
Concept / Approach:Economic utility arguments typically rely on diminishing marginal utility of income: each extra unit of income yields less satisfaction as income rises. Therefore, redistribution from high-income to low-income individuals can raise the sum of utilities. We check each assumption for necessity to the claim about maximizing total utility via equality.
Step-by-Step Solution:
1) Connect statement to diminishing marginal utility: if an additional rupee yields more utility for the poor than it subtracts from the rich, moving income toward equality raises total utility. This is exactly what Assumption I states in transfer terms.2) Assumption II, “equal pay for equal work,” is a fairness principle in labor markets, not a required premise for the total-utility maximization claim. Equality of income could, in theory, be achieved without any statement about wage norms.3) Therefore, I is necessary, II is not.Verification / Alternative check:Negate I: if transferring from rich to poor did not increase total utility, then full equality would not be utility-maximizing. The original claim collapses. Negate II: the utility claim remains intact without discussing pay norms, so II is not necessary.
Why Other Options Are Wrong:
- Only II / Either / Neither / Both: These either inject an unrelated fairness norm or deny the key diminishing-marginal-utility premise.
Common Pitfalls:Conflating ethical fairness rules (equal pay) with utility-maximization arguments. The former is normative about work; the latter is consequentialist about welfare totals.
Final Answer:Only assumption I is implicit