1.) Using the multipoint curved line drawing tool, graph the budget constraint facing this food stamp recipient with subsidized food stamps. Label this line 'L₁'. 2.) Using the line drawing tool, graph the budget constraint with no food stamp assistance. Label this line 'L2. 3.) Using the multipoint curved line drawing tool, graph the budget constraint with $100 in free food stamps. Label this line 'L3.' Carefully follow the instructions above, and only draw the required objects.

1.) Using the multipoint curved line drawing tool, graph the budget constraint facing this food stamp recipient with subsidized food stamps. Label this line 'L₁'. 2.) Using the line drawing tool, graph the budget constraint with no food stamp assistance. Label this line 'L2. 3.) Using the multipoint curved line drawing tool, graph the budget constraint with $100 in free food stamps. Label this line 'L3.' Carefully follow the instructions above, and only draw the required objects.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter5: Consumer Choice: Individual And Market Demand

Section: Chapter Questions

Problem 2TY

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Since 1979, low-income recipients have been given food stamps without charge. However, before 1979, people bought food stamps at a subsidized rate. For example, to get $1 worth of food stamps, a household paid about 40¢ (the exact amount varied by household characteristics and other factors). What is the budget constraint facing an individual if that individual may buy up to $100 per month in food stamps at 40¢ per each $1 coupon? Compare this constraint to the original budget constraint with no assistance and the budget constraint if the individual receives $100 of food stamps for free. Assume the individual has income of $120 per month. 1.) Using the multipoint curved line drawing tool, graph the budget constraint facing this food stamp recipient with subsidized food stamps. Label this line 'L₁'. 2.) Using the line drawing tool, graph the budget constraint with no food stamp assistance. Label this line 'L2.' 3.) Using the multipoint curved line drawing tool, graph the budget…
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