The Price Effects of Vouchers and Recipient Welfare: Using Figure 2 as a starting point (v is
Question:
The Price Effects of Vouchers and Recipient Welfare: Using Figure 2 as a starting point (v is the voucher point and j is the public-housing point), suppose the $300 program increases the price of housing, from $1 to $1.50 per unit of housing. Complete the graph with all the missing numbers.
a) Draw the voucher budget line with a housing price of $1.50.
b) For a household that chooses 300 units of housing service, its spending on all other goods is __________, computed as...
c) The slope of the budget line is ________ per unit of housing, compared to __________ if vouchers don’t affect housing prices.
d) Given the price effects of a voucher program, the typical recipient would be [better, worse] off with public housing because...
e) Vouchers will be better if the price elasticity of the supply of housing is a [large, small] number.
f) Subsidized public housing will be better if the price elasticity of the supply of housing is a [large, small] number.
Financial Management for Public Health and Not for Profit Organizations
ISBN: 978-0132805667
4th edition
Authors: Steven A. Finkler, Thad Calabrese