=+7.13† Policy Application: Public Housing and Housing Subsidies: In exercise 2.14, you considered two different public housing programs in parts

(a) and (b), one where a family is simply offered a particular apartment for a below-market rent and another where the government provides a housing price subsidy that the family can use anywhere in the private rental market.

A. Suppose we consider a family that earns $1,500 per month and either pays $0.50 per square foot in monthly rent for an apartment in the private market or accepts a 1,500-square-foot government public housing unit at the government’s price of $500 per month.