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The U.S. government has a food stamp program for families whose income falls below a certain poverty threshold. Food stamps have a dollar value that
The U.S. government has a food stamp program for families whose income falls below a certain poverty threshold. Food stamps have a dollar value that can be used at supermarkets for food purchases as if the stamps were cash, but the food stamps cannot be used for anything other than food. Suppose the program provides $500 of food stamps per month to a particular family that has a fixed income of $1,000 per month.
How would the budget constraint change if the government simply agreed to reimburse the family for half its food expenses?
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