Suppose a family (with 1 child) earns $50,000 per year and there is no publicly provided education. Assume the price of other goods is $2,000 and the price for education/ year is $5,000. Show how a school voucher redeemable for $20,000 worth of education changes the family's budget constraint. What happens to the amount of education the family purchases for the child?

Suppose a family (with 1 child) earns $50,000 per year and there is no publicly provided education. Assume the price of other goods is $2,000 and the price for education/ year is $5,000. Show how a school voucher redeemable for $20,000 worth of education changes the family's budget constraint. What happens to the amount of education the family purchases for the child?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 7QP

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