Question: Why isnt the equlibrium increased? Because they are able to buy more food? A country recently passed a food stamp legislation. Qualified households are given

Why isnt the equlibrium increased? Because they are able to buy more food?

A country recently passed a food stamp legislation. Qualified households are given food stamps, which can be used to purchase foods, but they cannot legally re-sell them. Suppose a household receives a grant of $300 of food stamps per month. How will this household's budget line be affected? (Hint: Consider two goods: food and other goods.)

Why isnt the equlibrium increased? Because they are able to buy more

Budget Line of Household (After Food Stamps) OHM r (71 ocd'.) Kinked Budget Line 2. New Equilibrium or Equilibrium 2 5. Quantity of Other Goods 1 " 001 3. Indifference I 4/ Curve 2 F006? 1. Position 2

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