Using education vs. “all other goods”, draw the following budget constraints: 1.) no public/govt. provision of education (i.e., all private; standard budget constraint); 2.) public provision of an (arbitrary) amount of education, E0, for free (with private education, E > E0, still available as an alternative). (Hint: see p. 73-74’s commencement ticket example.) b.) Now, in three separate graphs, using the above budget constraint and a pair of indifference curves in each case, illustrate how the provision of free public education (vs. no public provision) might 1.) increase; 2.) decrease; or 3.) have no effect on the level of a parent’s provision of education for their child. (For a bonus, find a second example where public provision would have no effect on the level of education.) In each case, think and perhaps write about the sorts of people these curves represent. c.) Explain the second case—when the provision of free public education would decrease the level of education that a parent chooses for their child. 2.) Using budget constraints and indifference curves, illustrate and explain the differences between the outcomes under NO public provision of schooling and educational vouchers. (Hint: see p. 71-73’s food stamp example.) 3.) Use budget constraints and indifference curves to illustrate and explain why any given level of free education (or more difficult– any given level of a voucher) have a different impact on poor vs. rich people. (Hint: draw very poor and very rich.)

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