The Rhodes and Samson families, with annual incomes of $100,000 and $120,000, respectively, live in a society where the primary objective of the government is to maximize the sum of the utility attained by everyone in the society. Which of the following is likely to be true in such a society?
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The government will redistribute income between the two families in such a way that both the families will have the same level of post-tax income.
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The government will tax the Rhodes family and provide income transfers to the Samson family to maximize total utility.
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The government will tax the Samson family and provide income transfers to the Rhodes family, but there will exist an inequality of income between the two families.
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The government will redistribute income between the two families in such a way that the welfare of the Rhodes family improves.