Consider food stamps where the government gives a person $200 worth of food stamps that provide a 50% discount on food bought. With $200 of these food stamps, the person can used the food stamps to buy $200 of food for $100 cash. After his food stamps are exhausted, the person can continue to buy food but must pay full price in cash. All Other Goods The blue budget line shows before getting food stamps. The green budget line is after getting food stamps. The red budget line is after getting food stamps. Food Moving from D to B, the person is using food stamps to buy food. From C to A, the person is using food stamps to buy food. At point A, all the food stamps are used. At point A, the person is consuming 100 units of food and spending the rest of his money on other goods.

Consider food stamps where the government gives a person $200 worth of food stamps that provide a 50% discount on food bought. With $200 of these food stamps, the person can used the food stamps to buy $200 of food for $100 cash. After his food stamps are exhausted, the person can continue to buy food but must pay full price in cash. All Other Goods The blue budget line shows before getting food stamps. The green budget line is after getting food stamps. The red budget line is after getting food stamps. Food Moving from D to B, the person is using food stamps to buy food. From C to A, the person is using food stamps to buy food. At point A, all the food stamps are used. At point A, the person is consuming 100 units of food and spending the rest of his money on other goods.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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