1.3 Consider Currie’s 2006 discussion of take- up of social programs, where the x- axis is program enrollment and the y- axis refers to monetary costs and benefits.

a If we measure the number of people enrolling in a program on the x- axis, why would the

“demand” for these programs be downward sloping? Draw a demand curve.

b Why would the costs of establishing a program be upward sloping? Draw a supply curve.

c What is meant by the equilibrium where supply equals demand?

d How can one model program “stigma,” and what does it do to equilibrium enrollment? Why?