Budget constraint with the housing subsidy

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Reference no: EM131675176

The state of Ohio has designed a new housing subsidy program, wherein people receive vouchers that they can give to their landlords. You receive $2400 of subsidy to start, whether you work or not. A participant will receive $2400 as long as they $8000 or less per year (segment 1). When a participant earns between $2400 and $8000, their voucher is reduced by .60 cents for every dollar earned (segment 2). When a participant earns more than 8000 they no longer receive the subsidy and return to their normal budget constraint. Graph the budget constraint with the housing subsidy.

Reference no: EM131675176

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