Question 4 {Chapter 8 and chapter 9} [a] Suppose you were charged with proposing a redesigned basic nutritional scheme in South African schools. Your opponents argue that South Africa follows a far too paternalistic approach in dealing with nutritional schemes at schools and that all nutritional schemes should be distributed by adding a cash transfer to qualifying individuals' disposable income. A cabinet minister suggests that staunch free-marketeers convincingly argue that subsidies tend to be ineffective due to the associated deadweight loss and it should be provided by the private sector, where his nephew happens to run a large-scale catering company. Your task is to convince the policymakers i. that the deadwaght loss of this subsidy could be neutralised by the positive extemality associated with better nutrition; and ii. which one of the options for the subsidised feeding scheme would have the most desired impact on the economy and the welfare of affected citizens: {i} an in-kind transfer or {ii} a cash transfer or {iii} provision of a feeding scheme by the minister's nephew? You should do so by means of a graph and a short explanation of your main arguments. [b] Suppose govemment were to decide that they would like to avoid paternalism in this decision at all costs. Would you argue for the imposition of conditionalities'? Explain your answer briey. [12]