Advanced Placement (AP), 24.10.2021 23:30 mrylenastewart
In a world of two goods X and Y, the government is considering two different schemes
to help the poor to buy more X, but at the same time, makes them equally better off.
The price of good Y is 1.
Scheme 1. Offer them a subsidy of s per unit.
Scheme 2. The government will give an amount of money equivalent to the Equivalent
Variation(EV) to the poor.
Which scheme will cost the government less money?
Answers: 2
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In a world of two goods X and Y, the government is considering two different schemes
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