Analyzing subsidies in Microsoft Excel.

Applying the bag line/indifference curve apparatus to policy issues reveals important and sometimes counterintuitive policy implications. Also, it provides practice in using the apparatus. The author applies these tools to subsidies. The analysis tread in the steps ofs textbook treatments but is reach outed at some points. In particular, the not away analysis explicitly models consumer behavior when the consumer is also the taxpayer. The approach uses Microsoft outrival workbooks to depict a variable-quantity subsidy (housing) and a fixed-quantity subsidy (schooling). In each case, a Cobb-Douglas