Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
Chapter 15, Problem 2SCQ

Jonathan is a single father with one child. He can work as a server for \$6 per hour for up to 1 , 5 00 hours per year. He is eligible for welfare, and so if he does not earn any income, he will receive a total of \$ 1 0 , 000 per year. He can work and still receive government benefits, but for every \$ 1 of income, his welfare stipend is \$ 1 less. Create a table similar to Table 15.4 that shows Jonathan’s options. Use four columns, the first showing number of hours to work, the second showing his earnings from work, the third showing the government benefits he will receive, and the fourth column showing his total income (earnings + government support). Sketch a labor-leisure diagram of Jonathan’s opportunity set with and without government support.

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Suppose a person earns \$500 a month. A social assistance program with a grant amount of \$1,000 a month and a clawback of 90% is implemented. What would be the payment the person receives from the program and what's the total amount of money they person will have to their disposal? The payment from the assistance program is \$450 and the total amount of money the person has to their disposal is \$950. The payment from the assistance program is \$550 and the total amount of money the person has to their disposal is \$1000. The payment from the assistance program is \$550 and the total amount of money the person has to their disposal is \$1050. The payment from the assistance program is \$950 and the total amount of money the person has to their disposal is \$1450.
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Question 2 Suppose a person earns \$500 a month. A social assistance program with a grant amount of \$1,000 a month and a clawback of 90% is implemented. What would be the payment the person receives from the program and what's the total amount of money they person will have to their disposal? The payment from the assistance program is \$450 and the total amount of money the person has to their disposal is \$950. The payment from the assistance program is \$550 and the total amount of money the person has to their disposal is \$1000. The payment from the assistance program is \$550 and the total amount of money the person has to their disposal is \$1050. The payment from the assistance program is \$950 and the total amount of money the person has to their disposal is \$1450. Question 3 Suppose a person earns \$1200 a month and welfare assistance program pays a maximum grant of \$1000 and has a clawback of 25%. Is the person eligible for the program and if so what's the person's payment from the…
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