Question: Suppose low income people are given vouchers worth 200 per month
Suppose low-income people are given vouchers worth $200 per month that they can use only to pay rent on housing. Use indifference curve analysis to show how the person could be made as well off with a $200 cash transfer. Would the consumer's choice of the amount of housing to rent be any different if he receives cash instead of housing vouchers? Use indifference curve analysis to show under what circumstance the $200 per month housing vouchers would cause the recipient to increase the amount of housing rented (measured in square feet) compared to what would be rented if the recipient received $200 in cash each month in lieu of the housing vouchers. Would this recipient be as well off under the housing voucher scheme as he would be with a cash transfer of equal value?
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