Question 4 (20 minutes) The province wishes to improve our environment and accordingly will subsidise your municipality $ 2 for every $1 you spend on sewage facilities up to a maximum of $ 1920. Your income is $ 1,200. The price of sewage facilities (Y) is $ 12 and the price of non-sewage facilities (X) is $ 4. Carefully draw the new budget line labelling all points of interest. Sewage facilities (Y) 300 280 230 260 165 240 180 220 200 180 160 140 100 120 100 40 20 0 20 60 80 100 120 140 160 180 200 220 240 260 280 300 Non-sewage facilities (X) At what point, are relative prices unaffected? Give the co-ordinates Y and X i.e. at what point do you obtain the maximum grant) How much better off are you with the conditional grant? What is the amount of the conditional grant? With an unconditional grant of the same dollar amount, how much better off would you be compared to the conditional grant