Question

Since the Food Stamp program started in 1964, economists, nutritionists, and policy makers have debated whether the specific food stamp coupons should be replaced by a general cash or check program. Explain using the theory of consumer choice whether poor people are better off receiving food stamps or cash. Use a graph (of indifference curves and a budget line) to show consumer preferences, budget, and consumer equilibria for the two different programs (food stamp vs. cash). Label your graph and also explain your analysis in words.

Answer 1