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.

a.Suppose a family has a fixed income of $1,000 per month. With "dollars spent on food" on the horizontal axis and "dollars spent on other goods" on the vertical, draw this family's monthly budget constraint without food stamps.

b.Suppose the program provides $500 of food stamps per month to each family. With "dollars spent on food" on the horizontal axis and "dollars spent on other goods" on the vertical, draw this family's monthly budget constraint with food stamps.

c. Illustrate how this family's budget constraint would differ if the government replaced the food stamp program with a cash subsidy program that simply gave this family $500 in cash instead of $500 in food stamps.

d.Which scenario would the family prefer, and what does your answer depend on?

e.How would the budget constraint change if the government simply agreed to reimburse the family for half its food expenses?