How to convert an in-kind subsidy into a cash subsidy

Reference no: EM131500063

Question: President Vladimir Putin of Russia recently pro-posed replacing in-kind subsidies such as free public transportation and rent-free apartments for government workers with cash subsidies of between $20 and $120 per month. The proposal led to widespread complaints among Russian citizens that the cash subsidies were not large enough. One reported asked, "What is a perk worth?" [Chivers, 2004]. Use an indifference curve analysis to show how to convert an in-kind subsidy into a cash subsidy that leaves people equally well off.

Reference no: EM131500063

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