If an in-kind transfer forces the recipient to consume more of the good than he would choose with a cash transfer of equal value, then:
A)the recipient would prefer the in-kind transfer over a cash transfer of equal dollar value
B)the recipient is indifferent between a cash transfer and an in-kind transfer
C)the recipient would prefer a cash transfer of equal dollar value
D)all of the above are possible

Question

Quizplus · Accepted Answer

If the recipient is forced to consume more of the good than he would choose with a cash transfer, then he is losing out on the opportunity to use that money to purchase something he values more. Therefore, he would prefer a cash transfer of equal value that would allow him to use the money on a good or service he values more.

If an In-Kind Transfer Forces the Recipient to Consume More