Background: Following the utilitarian principle of seeking the greatest good for the greatest number – economic inequality is problematic. A house that provides less utility to a millionaire as a summer home than it would to a homeless family of five, is an example of reduced "distributive efficiency" within society, that decreases marginal utility of wealth and thus the sum total of personal utility. An additional dollar spent by a poor person will go to things providing a great deal of utility to that person, such as basic necessities like food, water, and healthcare; while, an additional dollar spent by a much richer person will very likely go to luxury items providing relatively less utility to that person. Thus, the marginal utility of wealth per person ("the additional dollar") decreases as a person becomes richer. From this standpoint, for any given amount of wealth in society, a society with more equality will have higher aggregate utility. Some studies[2][32] have found evidence for this theory, noting that in societies where inequality is lower, population-wide satisfaction and happiness tend to be higher.

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Who would have larger marginal utility, John or Keith?
Answer: Keith

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Who would have smaller marginal utility, John or Keith?
Answer: John

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would David have larger or smaller marginal utility than Greg?
Answer: smaller

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would Greg have larger or smaller marginal utility than David?
Answer: larger

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: For an extra dollar, who would spend it on luxury items, David or Greg?
Answer: David

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: For an extra dollar, who would spend it on basic necessities, David or Greg?
Answer: Greg

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would John most likely use an extra dollar for luxury items or basic necessities?
Answer: luxury items

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would Keith most likely use an extra dollar for luxury items or basic necessities?
Answer: basic necessities

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would people in Russia most likely be more happy or less happy than people in Finland?
Answer: less happy

Situation: Finland has one of the lowest economic inequality in the world. Finland's neighbor Russia has a different story. After the collapse of Soviet Union, Russia's economic inequality soared to the point that it has now one of the highest economic inequality in the world. John and Keith are residents of Finland. While John is rich, Keith is not so fortunate - he is poor. Similarly, David and Greg are residents of Russia. While David is rich, Greg is in poverty.

Question: Would people in Finland most likely be more happy or less happy than people in Russia?
Answer: more happy