How university-s welfare differ if gift with-out secular-use


The federal government wants to support education but must not support religion. Tothis end, it gives the University of Notre Dame $2 million with the stipulation that thismoney be used for secular purposes only. The accompanying graph shows Notre Dame's pre-federal-gift budget constraint and best attainable indifference curve over secular and nonsecular expenditures. How would the university's welfare differ if the gift came with-out the secular-use restriction?

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Microeconomics: How university-s welfare differ if gift with-out secular-use
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