Chapter 5, Problem 14P

a)

To determine

Explain Ryan’s marginal rate of substitution and its property.

b)

To determine

Explain the choice of R without the food stamp program.

(c)

To determine

Illustrate the budget set of Ryan with the food stamp program.

d)

To determine

Explain the beast choice of R with the food stamp program.

e)

To determine

Identify the program cost faced by the government.