The Government Distributes Food Stamps That Can Only Be Used

Multiple Choice

The government distributes food stamps that can only be used to acquire food to low-income families. The budget line graph will show food on the horizontal axis and everything else on the vertical axis. After receiving food stamps, Ted's family is able to consume the same amount of food. The new consumption point for Ted's family will be:

A) on the new budget line, directly above the old consumption point.
B) on the new budget line, above and to the right of the old consumption point.
C) on the new budget line, directly to the right of the old consumption point.
D) remain precisely the same as the old consumption point.