Let us assure that the government wants to provide adequate nutrition to the fam
ID: 2338233 • Letter: L
Question
Let us assure that the government wants to provide adequate nutrition to the families so that each family is able to afford 250 pounds of meat per year. This can be done by transferring income to the families by the government.By using the information in the picture, compute the cost of this program.
Let us assure that the government wants to provide adequate nutrition to the families so that each family is able to afford 250 pounds of meat per year. This can be done by transferring income to the families by the government.
By using the information in the picture, compute the cost of this program.
3. Suppose the following information is true for country A: a. Average annual income b. Average consumption of meat: c. Estimated income elasticity of demand: d. Average price per pound of meat: e. Population composed of one million families $6,500 per family 200 pounds 10 $1.00 Eilie en that
Explanation / Answer
Original consumption: 200 pounds New consumption: 250 pounds Change in consumption: 250-200 = 50 pounds % change in consumption = 50/200 *100 = 25% Original Income: 6500 Income elasticity of demand: 10 Income Elasticity of demand = % change in consumption/ % change in Income 10 = 25% / % change in income % change in income = 2.5% Increase in Income required = 6500*2.50% = $ 162.50 per family Number of families: 1000,000 families Cost of Program = 1000,000 *162.50 = $ 162,500,000
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