4.1 Suppose you were charged with assessing a proposal by government to address radical economic transformation by providing free tertiary education to all deserving students. This would entail giving them the required amount for class fees, accommodation and all meals in transport in cash at the start of the academic year. The only requirement to qualify is that recipients should be historically disadvantaged. The opponents of the proposal argue that South Africa follows in would be far too costly to the South African society and that the system would be prone to abuse for the following reasons: it does not take income patterns into account and does not include nearly sufficient qualifying prerequisites for these cash transfers. Furthermore, a cabinet minister suggests that these criticisms may be valid. He states that his stepdaughter rubs a large-scale private sector publishing house who should be contracted to provide all text books to the subsidised students rather than giving them the cash to buy their text books. Your task is to convince the policymakers (a) that the deadweight loss of this "subsidy" could be neutralised by the positive externality associated increased access to free tertiary education by the deserving; and (b) which one of the options for the subsidised education would have the most desired impact on the economy and the welfare of affected citizens: (i) an in-kind transfer or (ii) a cash transfer or (iii) provision of a text books by the minister's stepdaughter's company? Elaborate on how you would structure this transfer. You should do so by means of a graph and a short explanation of your main arguments. 4.2 Would you argue in favour of the imposition of any additional conditionalities to qualify for such a scheme? Elaborate. [12]