The U.S. government spends over $74 billion on its Supplemental Nutrition Assistance Program (SNAP) to provide millions of Americans with the means to purchase food. Beneficiaries use an Electronic Benefits Transfer (EBT) card to transfer their government benefits from a Federal account to a retailer account. The funds on an EBT card cannot be sold for cash or used to purchase nonfood items. The averageSNAP benefit is about $284 per month. Suppose that, in the absence of SNAP, the average consumer must divide $600 in monthly income between food and "all other goods" such that the following budget constraint holds: $600 = $12A + $4F, where A is the quantity of "all other goods" and F is the quantity of food purchased. Using the graph below, draw the consumer's budget line in the absence of SNAP. On the same graph, show the budget line with SNAP. Instruction: If the budget line has any kinks, be sure to plot all the points where the kinks occur in addition to the points where the line crosses the intercepts. Graph both budget sets from where Food = 0 to where they cross the X-axis.

What is the market rate of substitution between food and "all other goods" for the budget line without SNAP? Instruction: Enter your response rounded to two decimal places.

With SNAP in place, would this consumer benefit from illegally exchanging SNAP benefits for cash?

multiple choice

• Yes - illegally exchanging food stamps for cash will definitely make him/her better off.
• Possibly - depending on his/her preferences.
• No - he/she cannot benefit from illegal exchange of food stamps.