Need help with this, correct answer is shown. All I need is how to arrive at the

Question

Need help with this, correct answer is shown. All I need is how to arrive at the answer, please show work

Since 1979, recipients have been given tood stamps. Betore 1979, however, people bought tood stamps at a subsidized rate For example, to get S1 worth of food stamps, a household paid about 20ç (the exact amount varied by household characteristics and other factors). What is the budget constraint facing an individual if that individual may buy up to $50 per month in food stamps at 20d per each $1 coupon? Assume the individual has income of ST0 per month. Use the multipoint curved ine arawing tool to graph the budcet constraint facing this food stamp recipient. Label this line 'L' Careruuy tollow the mstructions ahove, and oniy draw the required abjecrs 0 20 40 60 80 100 120 140 160 180 200 Foad expendilures in dollars per month AfTer ptting me tinal point of your mupoint Curve, press me EsC key an your keyboard to end the e

Explanation / Answer

Slope of budget line changes after the consumer buys 50 units of food stamps. Because till 50 units he has to pay $0.2 and after that $1. Slope of budget line is P1/P2. Initially the slope is 0.2/1= 0.2. After 50 units slope becomes 1/1= 1. Increase in slope causes the budget line to get steeper. Thatswhy budget line has a kink.

Maximum units of food stamps that can be bought is 50*0.2 + (70-50*0.2) = 10+60= 70, which is the x intercept.

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