Shen, who is currently unemployed, is a participant in four welfare programs that offer daily benefits of $10 each to people with no earned income. Each program then curtails its benefits by 50 cents for every dollar of income a recipient earns. Shen's identical twin brother, Sean, is enrolled in an experimental negative income tax program that gives him $40/day in benefits and then taxes him at the rate of 50 percent on each dollar of earned income. Now suppose Shen is offered a job that pays $4/hr, the same wage his brother earns. a. Draw the budget constraint for each twin. Instructions: To earn full credit for this graph you must plot all required points for each curve. 1. Use the line tool (Shen's budget constraint, plat 3 points) to draw the Shen's budget constraint. 2. Use the line tool (Sean's budget constraint, plot 2 points) to draw the Sean's budget constraint. After tax income (3/day) 98 84 70 56 42 28 14 2 4 6 8 10 12 14 16 18 20 22 24 26 Leisure (hrs/day) Tools Shami budgat Soam budger b. How many hours would they have to work before Shen ends up with more net cash and benefits than his brother? Instructions: Enter your answer as a whole number. hours/day

Shen, who is currently unemployed, is a participant in four welfare programs that offer daily benefits of $10 each to people with no earned income. Each program then curtails its benefits by 50 cents for every dollar of income a recipient earns. Shen's identical twin brother, Sean, is enrolled in an experimental negative income tax program that gives him $40/day in benefits and then taxes him at the rate of 50 percent on each dollar of earned income. Now suppose Shen is offered a job that pays $4/hr, the same wage his brother earns. a. Draw the budget constraint for each twin. Instructions: To earn full credit for this graph you must plot all required points for each curve. 1. Use the line tool (Shen's budget constraint, plat 3 points) to draw the Shen's budget constraint. 2. Use the line tool (Sean's budget constraint, plot 2 points) to draw the Sean's budget constraint. After tax income (3/day) 98 84 70 56 42 28 14 2 4 6 8 10 12 14 16 18 20 22 24 26 Leisure (hrs/day) Tools Shami budgat Soam budger b. How many hours would they have to work before Shen ends up with more net cash and benefits than his brother? Instructions: Enter your answer as a whole number. hours/day

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter12: Income Distribution, Poverty, And Discrimination

Section: Chapter Questions

Problem 10SQ

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Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $425 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 90 cents until the benefit equals zero. If Leo earns $275, then he will receive in total benefits from the two programs. Select one: O a. $0. b. $575. c. $602.50. d. $355. cor RC itar ork
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Susan is a single mother with three children. She is a cashier at a food market earning $7.75 per hour and works up to 2,000 hours per year. She is eligible for government benefits, so if she does not earn any income, she will receive a total of $17,050 per year. She can work and still receive government benefits, but for every $1 of income, her government stipend is $1 less. The government has decided to change the benefits policy of every $1 of income earned to reduce the government’s stipend by 60 cents. How will this change Susan's benefits received? What are her new choices? Complete the Revised Poverty Trap Table to present Susan’s options and provide answers to the following: What are the advantages of Susan working? What are the disadvantages of Susan working? What are the advantages of Susan receiving government benefits? What are the disadvantages of Susan receiving government benefits? Based on your findings from the Poverty Trap Table, should Susan continue to work or…