Consider;

Community groups in Autarka have expressed concern that a voucher scheme is unnecessarily paternalistic; depriving low income households of the choice of how to spend their income. These groups argue that the government's consumption targets could be met just as well using transfers (monetary payments from the government to the low income households). Transfers, they argue, would empower low income households to make their own consumption decisions.

2.1 Your task

Your task is to determine the optimal voucher value as a function of household income. The voucher must implement the government's target of 10kg of fresh fruit and vegetables consumed per week, while minimizing the cost of the vouchers to the government. You are also to assess the community groups' claim that a transfer scheme would implement the government's targets just as well. Do you think that the community groups are motivated by the health outcomes associated with a good diet? Or might they have another objective?

2.2 Household preferences

Using data from household surveys, you have determined that the 'typical' household's preferences are represented by the utility function,

U = (x + 36)y ,

where x represents the quantity of fruit and vegetables consumed, and y represents the

quantity of the composite good consumed. The associate marginal utilities are, MUx=y and MUy=x+36.

The price of fruit and vegetables is Px = $12 per kg, and the price of the composite good is normalized to Py = 1.

question:

Step 1: Derive the marginal rate of substitution for the typical household. (4 marks)

Step 2: Find the household's demands for 'fruit and vegetables', and for the composite good, as functions of the household's weekly income I. Hint: There is a critical income level below which the household's optimal consumption basket is a corner solution. (23 marks)

Step 3: What is the lowest level of income at which a household's consumption of fruit and vegetables will meet the Government's target? (5 marks)

Step 4: Suppose that the government decides to implement its target consumption of fruit and vegetables using transfers. How much would the government need to transfer to a household each week to achieve the 10kg consumption target? Hint: Your answer will be a function of the household's income I. You should assume that transfers cannot be negative. (4 marks)

Step 5: Suppose that, instead of transfers, the government decides to use vouchers redeemable for fruit and vegetables. What value of voucher would the government need in order to achieve the 10kg consumption target? Hint: Your answer will be a function of the household's income I. You should assume that vouchers cannot have a negative value. (14 marks)

d. Building Use the adjusted trial balance for Stockton Company to answer the questions that follow. Stockton Company Adjusted Trial Balance December 31 Cash 6,530 Accounts Receivable 2,100 Prepaid Expenses 700 Equipment 13,700 Accumulated Depreciation 1,100 Accounts Payable 1,900 Notes Payable 4,300 Bob Steely, Capital 12,940 Bob Steely, Withdrawals 790 Fees Earned 9.250 Wages Expense 2,500 Rent Expense 1,960 Utilities Expense 775 Depreciation Expense 250 Miscellaneous Expense Totals 29,490 29,490 19. Determine the owner's equity ending balance. a. $12,150Newborn Toys prepaid three years' rent ($31,500) on January 1, 2018. At December 31, 2018, Newborn prepared a trial balance and then made the necessary adjusting entry at the end of the year. Newborn adjusts its accounts once each year-on December 31. Read the requirements. What amount appears for Prepaid Rent on Newborn's unadjusted trial balance at December 31, 2018? What amount appears for Prepaid Rent on Newborn's adjusted trial balance at December 31, 2018? (Enter a "0" for any zero balances.) Prepaid Rent i Requirements X Balance a. Unadjusted trial balance at December 31, 2018 b. Adjusted trial balance at December 31, 2018 What amount appears for Prepaid Rent on a. Newborn's unadjusted trial balance at December 31, 2018? b. Newborn's adjusted trial balance at December 31, 2018? What amount appears for Rent Expense on a. Newborn's unadjusted trial balance at December 31, 2018? b. Newborn's adjusted trial balance at December 31, 2018? Print DoneThe polycentric staffing policy has the drawback of 0 failing to promote local talent @ avoiding women's rights costing too much O Isolating subsidiaries Question 13 (0.5 points) Which one of the following payment mechanisms would you use as an exporter if you are dealing w importer in a country with high political risk and unreliable banks? cash In advance document collection letter of credit open account Question 14 (0.5 points) Which of the following international staffing policy would have to be used if qualified people a home country? O ethnocentric policy O eccentric policy O geocentric policy O polycentric policyQUESTION 13 A list of all accounts and their balances after posting closing entries is referred to as: O A trial balance. O An adjusted trial balance. O A post-closing trial balance. An accounting trial balance. QUESTION 14 A list of all accounts and their balances after updating account balances for adjusting entries is referred to as: O A trial balance. O An adjusted trial balance. O A post-closing trial balance. O An accounting trial balance. QUESTION 15 A post-closing trial balance: Is a list of all accounts and their balances after adjusting entries. Is a list of all accounts and their balances before adjusting entries. Is a list of all accounts and their balances after closing entries. O Is a trial balance adjusted for cash-basis accounting.Question 23 3 pts Which of the following payment terms provides the exporter with the least degree of protection? Letters of credit Barter Prepayment Open Account Question 24 3 pts A US. rm sells its US. made watches in a chain of shops in Switzerland. It could reduce exchange rate risk by: Borrowing from a Swiss bank " Keeping all of its prots in a Swiss bank account " Buying a chocolate factory in the US. and begin selling chocolates in Switzerland " Trying to expand to Germany because the Swiss franc and Euro are highly positively correlated