Explain why the food stamp program can have the same effect on the consumption pattern and well-being of recipients as an outright cash transfer of the same cost. Why do you think it is not converted into an explicit cash transfer program, thereby saving the cost of printing and redeeming food stamps?
Answer to relevant QuestionsSuppose that Thurston, a color- blind consumer, has $ 80 to spend on either pink or lime- green sweaters. Thurston does not care what color sweater he wears but deems it very important to buy as many sweaters as possible ...Explain how the indifference curve and budget line apparatus are used to derive a consumer’s demand curve. For a demand curve, certain things are held constant. What are they, and how does this approach hold them constant? Diamonds clearly satisfy less important needs than water, which is essential to life. Yet according to market prices, the essential commodity, water, is worth less than the less essential commodity, diamonds. Why would a ...Could the snob effect ever overpower the combined substitution and income effects associated with an increase in the price of a good? Explain why or why not.We assumed in the text that families receive the public school subsidy at no direct cost. Yet families pay property (and other) taxes that are used to finance schools. Does this fact invalidate the analysis in the text?
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