ECO 200 Which subsidy provides a bigger benefit to the recipient

Using indifference curve diagrams, assess the welfare effects of a price subsidy compared with a lump-sum subsidy for childcare:(a) Which subsidy provides a bigger benefit to the recipient?(b)Which subsidy increases the demand for child care services more?(c) Which subsidy imposes lower costs on other consumers of child care services?(d)If a parent did not receive a subsidy, would they still have a preference for the type of subsidy the government pays?(e) Canada chose the lump-sum subsidy, but limited the amount that a family could receive. How do such limits effect the choice of subsidy?

 

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