levels the playing field by a factor of 10 versus the starting point.
Let's say there were only 10 poor people that contributed to the pipes. The total funding would be $10,000 -- a subsidy of $9,000. So 10x multiplier both for the pipes and the art.
Then let's also say that the marginal utility of $100 for a poor person is equivalent to the marginal utility of $1,000,000 for a rich person.
So we have the same number of contributors for each project, but a much higher marginal utility-per-dollar for lead pipes. But the socially optimal funding would be at the point where the marginal utility-per-dollar are equal for both projects (per the Equimarginal Principle).
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Let's say there were only 10 poor people that contributed to the pipes. The total funding would be $10,000 -- a subsidy of $9,000. So 10x multiplier both for the pipes and the art.
Then let's also say that the marginal utility of $100 for a poor person is equivalent to the marginal utility of $1,000,000 for a rich person.
So we have the same number of contributors for each project, but a much higher marginal utility-per-dollar for lead pipes. But the socially optimal funding would be at the point where the marginal utility-per-dollar are equal for both projects (per the Equimarginal Principle).