Unformatted text preview: 1 1 2 (with $1,000 cash) A B 2 1 1 2 (with $1,000 food stamps) Food Nonfood Consumption 3 Figure 21-17 C ASH VERSUS I N-K IND T RANSFERS . Both panels compare a cash transfer and a similar in-kind transfer of food. In panel (a), the in-kind transfer does not impose a binding constraint, and the consumer ends up on the same indifference curve under the two policies. In panel (b), the in-kind transfer imposes a binding constraint, and the consumer ends up on a lower indifference curve with the in-kind transfer than with the cash transfer....
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- Spring '10
- in-kind transfer, Nonfood Consumption