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You have a new job in the office of the Minister for Housing. Suppose that housing for low income families is at present subsidised by

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You have a new job in the office of the Minister for Housing. Suppose that housing for low income families is at present subsidised by the government. A brieng paper from the Department of Social Welfare suggests that the housing subsidy could be abolished and replaced by a general increase in the benet level for these low-income families, leaving them no worse or better off (i.e. no change to their level of utility). The Minister asks you to analyse the implications of the proposed policy change. Using an indifference curve framework, with housing measured in square metres on the horizontal axis and \"all other goods\" on the vertical axis: (a) show the effect of the removal of the current housing subsidy and the effect of intro ducing in its place a general lowincome benet supplement for these families; (b) discuss the effect of the policy change on the quantity of housing demanded

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