Suppose now that the previous subsidy for schooling is removed, and the government instead institutes a "Free Lunch Program". For each unit of Schooling that an individual purchases, they receive a free unit of Food (for $0). 11. Draw this new budget line for this individual with Schooling on the x-axis and Food on the y-axis. Label the x-intercept, y-intercept, and any kinks for this budget constraint. Call this Budget Constraint 3. [3 points]

Suppose now that the previous subsidy for schooling is removed, and the government instead institutes a "Free Lunch Program". For each unit of Schooling that an individual purchases, they receive a free unit of Food (for $0). 11. Draw this new budget line for this individual with Schooling on the x-axis and Food on the y-axis. Label the x-intercept, y-intercept, and any kinks for this budget constraint. Call this Budget Constraint 3. [3 points]

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 3SQP

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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. Draw the family's budget constraint. Show how free public education worth $20,000 per student changes the budget constraint. Draw a set of indifference curves to show that the family increases education consumption after b. 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?
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if we take examples and suppose there are 2 products, milk and yoghurt, and if the milk is rationed for people by government, how can we understand the satisfaction maximization choice with the indifference curve and budget line
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What assumptions are necessary for supposing that individual preferences can be inferred and valued from the choices that individuals make?give a reason