Microeconomics W5 Dis 1. Transfers In 250 word, discuss why would cash...

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Microeconomics W5 Dis 	 		 			 		 		 			1. Transfers 		 	  In 250 word, discuss why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective?  	 		 			2. Tariffs and Quotas 		 	  In 250 words, discuss who gains and who loses from a tariff? How do the effects of tariffs differ from the effects of quotas? If you were a small country, what would you rather utilize?
	
Document Preview: Microeconomics W5 Dis1. TransfersIn 250 word, discuss why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective? 2. Tariffs and QuotasIn 250 words, discuss who gains and who loses from a tariff? How do the effects of tariffs differ from the effects of quotas? If you were a small country, what would you rather utilize?

David · Accepted Answer

1. Transfers
In 250 word, discuss why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective? 
Both cash transfers and in kind transfers are aimed to improve the opportunity set available to a consumer. They allow the recipient to expand her consumption basket. Let us assume that the expenditures made by the government are equal on both transfers. The main advantage of cash transfers is that is allows flexibility in choices made by the recipient. She is free to use the cash on whatever goods she would want to. In the case of in kind transfers this choice is restricted as the recipient is ‘forced’ to consume whatever is doled out as transfers. From the government’s perspective, cash transfers are less attractive socially as the cash can be spent on frivolous consumption (like alcohol that reduces welfare rather than improving it, as seen in many under developed and developing nations).

Microeconomics W5 Dis 1. Transfers In 250 word, discuss why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government...

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