Question: Consider the model of an in kind transfer in Figure
Consider the model of an in- kind transfer in Figure 12.3. Suppose that it is illegal for a recipient of the cheese to sell it. Nevertheless, there is a black market, where cheese can be sold for $ 1 per pound. Show how the existence of the black market affects the individual’s bud-get constraint. Does it make her better off?
Relevant QuestionsSherry’s utility is US and her income is YS. Marsha’s utility is UM and her income is YM. Suppose it is the case that: Define the Pareto efficient redistribution, and explain why the concept is relevant in this ...SNAP benefits are phased out in a complicated fashion that varies from state to state. However, at some point near the poverty line, SNAP benefits worth about $ 1,250 are suddenly lost. Ignoring other aspects of the tax and ...Consider a society with only two people— one rich and one poor— who have the same utility functions. These utility functions exhibit diminishing marginal utility. Suppose that taxes are set such that the total amount of ...US politicians from both parties occasionally propose cutting the federal gasoline tax (which is a unit tax) only during the summer months, when prices tend to increase. Assume that gasoline refiners run near full capacity ...In 2012, the Nigerian government removed a subsidy on fuel. One critic of the removal of the subsidy argued that the government was unable to clearly articulate how this would benefit Nigerians, stating, “ They made ...
Post your question