Share
Explore BrainMass

Paying rent on housing

Suppose low-income people are given vouchers worth $200 per month that they can use only to pay rent on housing. Use indifference curve analysis to show how the person could be as well off with a $200 cash transfer. Would the consumer's choice of the amount of housing to rent be any different if he/she receives cash instead of housing vouchers? Use indifference curve analysis to show under what circumstance the $200 per month housing vouchers would cause the recipient to increase the amount of housing rented (measured in square feet) compared to what would be rented if the recipient received $200 in cash in lieu of the housing vouchers. Would this recipient be as well off under the housing voucher scheme as he/she would be with a cash transfer of equal value? Explain your answer. Create a graph on a spreadsheet program (such as MS Excel), copy and paste it into a MS Word document, write your answer in the MS Word document, and upload it to Blackboard.

Solution Preview

The response addressed the query is posted in 348 words with references.

// Indifference curve shows the combination of housing services and other things to the low income people. The rent voucher will help low income people to increase their housing services but the cash voucher will help them to increase house services and other things. The impact of cash voucher and rent voucher in different situation will be elaborated in the following paragraphs.//

People of low income group, with the rent voucher of $200, will increase only housing ...

Solution Summary

The response addresses the queries posted in 369 words with references.

$2.19