Is a wealthy person more likely than a low-income person to prefer to receive a

Question

Is a wealthy person more likely than a low-income person to prefer to receive a government payment of $300 in cash to $300 worth of food stamps? Why or why not?

Relative to a wealthy person, a low-income person is:

A. more likely to prefer $300 in cash because they are less likely otherwise to spend $300 on food.

B. equally likely to prefer $300 in cash because they are likely to spend less on food and on other consumption.

C. more likely to prefer $300 in cash because they are more likely otherwise to spend a larger proportion of their income on food.

D. more likely to prefer $300 in food stamps because they are likely to spend less on food.

E. more likely to prefer $300 in food stamps because they are more likely to be hungry.

Explanation / Answer

Right Answer is : (A )

Wealthy people have already met their needs of basic food items. Thus, they would not prefer the food stamp worth $ 300. Instead, they will prefer to have $ 300 in cash and spend elsewhere. in non-food items.

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