Suppose that a single mother of two kids earns 400 per week, and her housefhold consumes two goods: Food ( Qfood) and Other Good (Qother). Suppose that the price of Food is 4 per unit ( Other Good is measured in monetary term, so the price of one unit is 1). The government is considering offering a special support programme using food voucher which will make Food more affordable for single mothers.

ECON4002 Coursework Problem Set page 9 Suppose now that, instead of the food voucher, the government will offer single mothers an income subsidy (in cash) of $160 per week. (A2d) Show graphically below how this income subsidy differs from the aforementioned food voucher programme, by comparing their effects on how they increase the size of the mother's budget set. Explain briefly below the changes that you introduced to the graph. 4 marks Qother