Explain why distributing $500 worth of food stamps to someone is not the same thing economically speaking as giving them $500 in cash? Why might the cash option make the poor better off than food stamps?
What will be an ideal response?
Food stamps can only be used for purchasing for food. Giving someone cash would allow them to spend money on other things as well. It may very well be that there are other expenditure items in the budget of some of the poor that have a higher priority and utility than food like heating oil, electricity, clothes or insurance. Cash allows them to spend more money on these items.
You might also like to view...
Suppose two neighborhoods with 10 homes each in Buffalo, New York are identical except one of them is near a toxic waste dum
A) $400,000. B) $1,300,000. C) $900,000. D) $500,000. E) $90,000.
Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because
A) car sellers would never lie. B) car buyers are gullible. C) the signal cannot be false. D) a false signal can be costly to the seller.