Conditional versus Unconditional Grant The Regional Government has a budget of $10,000. It spends its money on sewage treatment (X) and other goods (Y). Px=$200 Py=$100 Suppose the Provincial Government wants to encourage the Region to invest more in sewage treatment and offers the Region a matching grant. For every $1 the Region spends on sewage treatment, the Province will give it $1. The Region is initially in equilibrium at E. Y other goods 100 95 90 85 80 75 70 65 60 55 50 45 35 10 30 25 20 15 10 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Xsewage treatment 1) If the Region were to take the conditional grant, what would be its utility improvement ? (1 mark)2} What is the total Expenditure required to purchase the new amount of sewage treatment? [1 mark) 3} How much of this required Expenditure is from the conditional grant? {3 marks] 4} How much is from the Region's own budget? [1 mark) 5} If. instead of the conditional grant. the Province provided the region with an income transfer (Le. an unconditional grant] equal to the amount of the conditional grant found in (3), would the Region continue to purchase the same amount of sewage treatment? If not, wh},r not? [2 marks} E} 1What is the amount of sewage treatment purchased under the unconditional grant? lath},r is the unconditional grant considered more efficient? (2 marks)