Suppose that the government provides eligible people with food stamps for cheese. Abigail, an eligible individual has an income of $6 and plans to spend it on some combination of cheese and other goods The per unit price of cheese and other goods is $0.25. Sketch the budget line for Abigail, who plans to spend $6 on some combination of cheese and other goods. Add an indifference curve (label it IC1) assuming her optimal combination is 14 units of other goods. (Hint: you have to find the other point on the IC for cheese)

Suppose that the government provides Abigale with a food stamp of 5 units of cheese. Show the effect on the budget line and add a new indifference curve (label it IC2) assuming the optimal combination is now 10 units of other goods. (Hint: you have to find the other point on the IC for cheese)

Analyze the movement of the IC from IC1 to IC2. Does Abigale prefer the food stamp?