President Vladimir Putin of Russia proposed re-placing in- kind subsidies such as free public trans-portation and rent- free apartments for government workers with cash subsidies of between $ 20 and $ 120 per month. The proposal led to widespread complaints among Russian citizens that the cash subsidies were not large enough. One reportedly asked, “What is a perk worth?” [ Chivers, 2004]. Use an indifference curve analysis to show how to convert an in- kind subsidy into a cash subsidy that leaves people equally well off.
Answer to relevant QuestionsThe Census Bureau recently created a new supplemental poverty measure, which defines the poverty threshold as the amount of money that the poorest third of Americans spend on food, clothing, shelter, and utilities. ...Sherry’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 ...The Section 8 program for housing assistance discussed in this chapter in effect shifts out the demand curve for low income housing in a given community. Draw supply and demand diagrams that are consistent with the following ...In an effort to reduce alcohol consumption, the government is considering a $ 1 tax on each gallon of liquor sold (the tax is levied on producers). Suppose that the demand curve is QD = 500,000 - 20,000 P (where QD is the ...Responding to a congressional proposal to impose a 5 percent tax on elective cosmetic surgery, a spokesman for a company that pro-duces Botox said such a tax would result in “ a very marginal” increase on the $ 440 cost ...
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