Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Chapter 4, Problem 12PAA
To determine
To draw the budget line of a consumer with the help of given budget line equation.
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“The executive action is estimated to increase Supplemental Nutrition Assistance Program (SNAP) benefits, otherwise known as food stamps, for the 12 million families who rely on the aid most. The order would increase weekly benefits for a family of four by 15 or 20 per cent. An increase of benefits awarded through a school meals program for low-income families could also give a family of three children more than $100 in extra benefits every two months” (Hall, 2021).
What problems do you foresee if these benefits were not available to these low-income families and migrants within the U.S.?
The graph below shows the budget constraint between income and leisure for an individual. The individual has a total
of 4000 hours to divide between working and leisure for the entire year. The maximum an individual could make by working
all 4000 hours is $20,000. For every hour spent in leisure, one less hour is spent working and vice versa.
Suppose that, as illustrated in the graph, a government antipoverty program guarantees the individual $10, 000 in income
per year.
As the current government support is too low to help individuals out of poverty, the government has decided to increase the
government support to $22, 000 per year. The individual is no longer motivated to work any hours as it is not possible for
him/her to make more income than the guaranteed government support.
Move the Government Support line to illustrate this outcome.
Provide your answer below:
30000
25000
(0, 20000).
20000
15000-
Government Support ($10000)
10000
5000
(4000, Q)
2000
4000
3000
Leisure (Hours)
1000…
“The executive action is estimated to increase Supplemental Nutrition Assistance Program (SNAP) benefits, otherwise known as food stamps, for the 12 million families who rely on the aid most. The order would increase weekly benefits for a family of four by 15 or 20 per cent. An increase of benefits awarded through a school meals program for low-income families could also give a family of three children more than $100 in extra benefits every two months” (Hall, 2021).
Discuss the impact of the Affordable Care Act (ACA) on the increase in SNAP benefits from low-income families in the United States.
Chapter 4 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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