Question 1 (LO1)

Question 1 (LOI)e For each of the following statements, write whether it is True or False, and justify your answer. Marks will be given based on your explanation. Paul has an income of $1 ,000. He spends $100 on potatoes and $900 on everything else. The government is planning to assist low-income people like Paul. In particular, they are considering giving him either $200 in cash or giving him $200 in stamps that can only be used to buy potatoes.e a) If potatoes are a normal good, then Paul will be strictly better off with $200 cash than with $200 in stamps. [5 marks]e b) If potatoes are an inferior good, then Paul will be strictly better off with $200 cash than we