What happens to the amount of education the family purchases

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Reference no: EM133633558

Question: Suppose a family (with only one child) earns $50,000 per year and lives in a community with-out publicly provided education. a. Draw the family's budget constraint showing the trade-off between quantity of education for the child and all other goods. b. Suppose now that an option of free public education worth $8,000 per student is intro-duced. Show how this changes the family's budget constraint. c. The family reduces its consumption of edu-cation after the introduction of free public education. Using part b, draw a set of indif-ference curves consistent with this outcome. d. Now show how a school voucher redeemable for $8,000 worth of education changes the family's budget constraint. What happens to the amount of education the family purchases for the child?

Reference no: EM133633558

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