Question
Several researchers tried to test some implications of consumer theory using data on food stamps recipients. (a) If a food stamp recipient, call him Foster,
Several researchers tried to test some implications of consumer theory using data on food stamps recipients.
(a) If a food stamp recipient, call him Foster, chooses an "inframarginal" basket after receiving food stamps, what does the theory predict he should do if he receives a cash transfer of the same value instead of food stamps?
(b) If a food stamp recipient, call her Ruhi, chooses a "marginal" basket after receiving food stamps, what does the theory predict she should do if she receives a cash transfer of the same value instead of food stamps?
* please give me the correct answer with explanation and conclusion.
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