Suppose again the government offers poor people a housing voucher and units of housing is graphed on the x-axis and the composite good is graphed on the y-axis.The consumer will always choose to consume the exact amount of the housing voucher's units of housing when

Question

Quizplus · Accepted Answer

The consumer will always choose to consume the exact amount of the housing voucher's units of housing when the consumer's indifference curves are flatter (closer to horizontal) than the budget line where it slopes upward. This is because the consumer will always choose the point on the budget line that gives them the highest level of utility, and when the indifference curves are flatter than the budget line, the highest level of utility will be achieved by consuming the exact amount of the housing voucher's units of housing.

Suppose Again the Government Offers Poor People a Housing Voucher