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17. The federal government wants to support education but must not support reli- gion. To this end, it gives the University of Notre Dame $2

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17. The federal government wants to support education but must not support reli- gion. To this end, it gives the University of Notre Dame $2 million with the stipu- lation that this money be used for secular purposes only. The accompanying graph shows Notre Dame's pre-federal-gift budget constraint and best attainable indifference curve over secular and nonsecular expenditures. How would the uni- versity's welfare differ if the gift came without the secular-use restriction? (LO4) Nonsecular activities ($M) 16 14 12 10 8 6 4 2 Secular activities ($M) 0 2 4 6 8 10 12 14 16 18

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