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Suppose that the market price of rapid tests is $20 apiece, but that a new program allows the household to buy up to 10 rapid
Suppose that the market price of rapid tests is $20 apiece, but that a new program allows the household to buy up to 10 rapid tests directly from the government for $10 apiece. If the market price of rapid tests didn't change, how, if at all, would the program affect the household's budget constraint? (Hints: (i) Is the budget constraint still a straight line? (ii) How, if at all, does the program affect the horizontal intercept of the budget constraint?)
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