answer:
To graph the effect of a matching grant of $0.50 for each dollar you spend on schools on your budget constraint, we need to understand how the grant affects your budget line.
A budget constraint shows the various combinations of two goods that you can afford given your income and the prices of the goods. In this case, we are looking at the effect of the matching grant on the budget constraint for spending on schools.
Let's assume your budget line before the matching grant is represented by the equation:
P_schools * X_schools + P_other * X_other = Income,
where P_schools is the price of spending on schools, X_schools is the quantity of spending on schools, P_other is the price of the other good, X_other is the quantity of the other good, and Income is your total income.
With the matching grant of $0.50 for each dollar you spend on schools, the effective price of spending on schools decreases. This means that for each dollar you spend on schools, the cost is reduced by $0.50. Therefore, the new equation for your budget line becomes:
(P_schools - 0.50) * X_schools + P_other * X_other = Income.
To graph the effect of the matching grant on your budget constraint, plot the points that represent the combinations of spending on schools and the other good that were affordable before the grant. Then, plot the new points that represent the combinations of spending on schools and the other good that are affordable with the grant.
Connect these points to form the budget constraint before the grant and the new budget constraint after the grant. The new budget constraint will have a flatter slope because the effective price of spending on schools has decreased.
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Alli <3