1. In Question 1 of PS 1, you worked the details of the two policies that...

 

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1. In Question 1 of PS 1, you worked the details of the two policies that intended to help individuals in need. In particular, you presented reasons suggesting that cash transfers are always "at least as good" for their recipients as in-kind transfers, and are sometimes better. a. Explain how your reasoning and suggestion presented in Question 1 of PS 1 are based on the economist's interpretation of a consumer's welfare as preference satisfaction, and the underlying assumptions there. b. However, government policies often involve in-kind transfers: this is the case for food, housing, education, legal services, health care, and many other goods, and in-kind transfers are often much more popular than cash transfers. Can you think of possible reasons that the government chooses in-kind rather than cash transfers in such cases? Make sure that you spell out your assumptions in the process of presenting your answers. 1. In Question 1 of PS 1, you worked the details of the two policies that intended to help individuals in need. In particular, you presented reasons suggesting that cash transfers are always "at least as good" for their recipients as in-kind transfers, and are sometimes better. a. Explain how your reasoning and suggestion presented in Question 1 of PS 1 are based on the economist's interpretation of a consumer's welfare as preference satisfaction, and the underlying assumptions there. b. However, government policies often involve in-kind transfers: this is the case for food, housing, education, legal services, health care, and many other goods, and in-kind transfers are often much more popular than cash transfers. Can you think of possible reasons that the government chooses in-kind rather than cash transfers in such cases? Make sure that you spell out your assumptions in the process of presenting your answers.

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a The economists interpretation of a consumers welfare as preference satisfaction is based on the idea that individuals make choices to maximize their ... View the full answer