Question

Suppose an in-kind subsidy is given from Govt. to a section of people so that the subsidy is used to purchase food at retail outlets. Consider another case where cash subsidy is given which consumer can spend either on X (food) or on Y (Other commodity) . In Which of the above two cases consumer will be better off? If cash subsidy is taxed then what will be the case? Explain the answers in your own words using the concept of Indifference Curve. My work

Answer 1

Explanation:

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