In a world of two goods X and Y, the government is considering two different schemes to help the poor to buy more X, but at the same time, makes them equally better off.
The price of good Y is 1.
Scheme 1. Offer them a subsidy of s per unit.
Scheme 2. The government will give an amount of money equivalent to the Equivalent
Variation(EV) to the poor.
Which scheme will cost the government less money?

For review 1. in terms of which government is sovereign, differentiate among a unitary system, a confed- eral system, and a federal system of government. 2. to which level of government does the constitution distribute the enumerated po implied powers? concurrent powers? reserved powers? provide several power. 3. what matters fall within the scope of state sovereignty? differentiate among dual federalism, cooperative federalism, centralized federalism, and conflicted federalism. how does the national government use grants-in-aid, mandates, and preemption to direct the policy of state and local governments? 6. what do we mean by intergovernmental relations? why is the term a good description of u.s. federalism today? 7. list several advantages and several disadvantages of a federal system.