(Answered) The government has implemented a new welfare program

Economics

The government has implemented a new welfare program through which it sends food baskets to individuals with low incomes. Mary receives one of these food baskets containing 10 food items (10 units of food) every month. Mary spends spends all her income on food and clothing and the price of food is $10, the price of clothing is $100 and her monthly income is $1,000.

(a) Write the equation and draw a graph for Mary's budget constraint if she does not receive the welfare basket. Draw the quantity of food on the x-axis and the quantity of clothing in the y-axis and label all the relevant points on the budget constraint.

(b) In the same graph, draw Mary's budget constraint after receiving the welfare program (label all the relevant points on the budget constraint).

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