Question: 8. (5 pts) Now, imagine instead that a subsidy was only offered to the low wealth consumers. Every low wealth consumer gets a housing voucher

 8. (5 pts) Now, imagine instead that a subsidy was only

8. (5 pts) Now, imagine instead that a subsidy was only offered to the low wealth consumers. Every low wealth consumer gets a housing voucher of $o total for housing. It can only be spent on housing. Set up the utility maximization problem and solve. Note, this is now a Kuhn-Tucker problem, with a budget of m + o, and a constraint that the consumer spends at least $o on housing: a. What is the condition on o for the solution to be a corner point solution? What are h and y in this case? b. What is condition on o to be an interior solution, and what is h in this case? 8. (5 pts) Now, imagine instead that a subsidy was only offered to the low wealth consumers. Every low wealth consumer gets a housing voucher of $o total for housing. It can only be spent on housing. Set up the utility maximization problem and solve. Note, this is now a Kuhn-Tucker problem, with a budget of m + o, and a constraint that the consumer spends at least $o on housing: a. What is the condition on o for the solution to be a corner point solution? What are h and y in this case? b. What is condition on o to be an interior solution, and what is h in this case

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