Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 15, Problem 46P
Susan is a single mother with three children. She can earn
Create a table, patterned after Table 15.3. The first column should show Susan’s choices of how many hours to work per year, up to
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Please answer 1, 2, and 3!
Susan is a single mother with three children. She can earn $8 per hour and works up to 2,000 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling $16,000 per year. For every $1 of income she earns, her level of government support will be reduced by $1. The table below is patterned after Table 15.8 from the text.
Number of Work Hours
Earnings from Work
Government Benefits
Total Income
2000
$16,000
$0
$16,000
1600
$16,000
1200
$16,000
800
$16,000
400
$3200
$12,800
$16,000
0
$0
$16,000
$16,000
Complete the table.
Is this program an example of a poverty trap? Explain your answer.
If this program is an example of a poverty trap, how can this program be altered to avoid this problem?
Polly, Molly, and Dolly are all single mothers. They each can earn $10 per hour working
for up to 2,000 hours per year. Their government runs a welfare system that gives
income benefits of $5,000 per year for single mothers with no income. The welfare
benefits are reduced by $1 for every $2 in earned income. Currently, the government
also provides free health care for children of single mothers with less than $25,000 in
income. Each mother values this benefit at $2,000 per year. Under this system, Polly
works 200 hours per year, Molly works 1,025 hours per year, and Dolly works 1,500
hours, so only Polly receives welfare.
b. Draw a representative indifference curve for each mother. Discuss how the
welfare program changes the behavior of these three individuals.
d. The government decides to remove the welfare lock by providing free low-
quality public health care (Ho-$2,000) for everyone. If the individuals want to
consumer health care more than Ho, they have to turn to private health…
The graph below shows the budget constraint between income and leisure for an individual. For every hour
spent in leisure, one less hour is spent working and vice versa. Move the budget constraint to illustrate the trade
off that exists when the individual can earn $25,000 if he/she works 4,000 hours, assuming the individual does
not qualify for government support. Assume that the individual only has 4,000 hours to distribute between work
and leisure.
Provide your answer below:
35000
%24
30000
25000
20000
15000-
(0, 14000)
10000
-5000-
| (2200, 0)
1000
2000
3000
4000
5000
Leisure (Hours)
Income ($)
Chapter 15 Solutions
Principles of Economics 2e
Ch. 15 - Describe how each of these changes is likely to...Ch. 15 - Jonathan is a single father with one child. He can...Ch. 15 - Imagine that the government reworks the welfare...Ch. 15 - We have discovered that the welfare system...Ch. 15 - How does the TANF attempt to loosen the poverty...Ch. 15 - A group 0f 10 people have the following annual...Ch. 15 - Table 15.9 shows the share of income going to each...Ch. 15 - Using two demand and supply diagrams, one for the...Ch. 15 - Using two demand and supply diagrams, one for the...Ch. 15 - Here is one hypothesis: A well-funded social...
Ch. 15 - Here is a second hypothesis: A well-funded social...Ch. 15 - Which set of policies is more likely to cause a...Ch. 15 - Why is there reluctance on the part of some in the...Ch. 15 - How is the poverty rate calculated?Ch. 15 - What is the poverty line?Ch. 15 - What is the difference between poverty and income...Ch. 15 - How does the poverty trap discourage people from...Ch. 15 - How can the effect of the poverty trap be reduced?Ch. 15 - Who are the near-poor?Ch. 15 - What is the safety net?Ch. 15 - Briefly explain the differences between TANF, the...Ch. 15 - Who is included in the top income quintile?Ch. 15 - What is measured on the two axes of a Lorenz...Ch. 15 - If a country had perfect income equality what...Ch. 15 - How has the inequality of income changed in the...Ch. 15 - What are some reasons why a certain degree of...Ch. 15 - What are the main reasons economists give for the...Ch. 15 - Identify some public policies that can reduce the...Ch. 15 - Describe how a push for economic equality might...Ch. 15 - What goods and services would you include in an...Ch. 15 - If a family of three earned 20,000, would they be...Ch. 15 - Exercise 15.2 and Exercise 15.3 asked you to...Ch. 15 - Explain how you would create a government program...Ch. 15 - Many critics of government programs to help...Ch. 15 - Think about the business cycle: during a...Ch. 15 - Explain how a country may experience greater...Ch. 15 - The demand for skilled workers in the United...Ch. 15 - Explain a situation using the supply and demand...Ch. 15 - What do you think is more important to focus on...Ch. 15 - To reduce income inequality, should the marginal...Ch. 15 - Redistribution of income occurs through the...Ch. 15 - How does a society or a country make the decision...Ch. 15 - Explain what the long- and short-term consequences...Ch. 15 - In country A, the population is 300 million and 50...Ch. 15 - In country B, the population is 900 million and...Ch. 15 - Susan is a single mother with three children. She...Ch. 15 - A group of 10 people have the following annual...
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- Sam is a single father with 2 children. He earns $15 per hour and can work up to 1,800 hours per year. If Sam does not earn any income at all, he receives government benefits totaling $20,000 per year. For every $1 of income he earns, his level of government support is reduced by $1. Which of the following statement best describes Sam’s situation? Group of answer choices A. He has no monetary incentive to work. B. He has a monetary incentive to work if he works more than 1800 hours. C. He has a monetary incentive to work as long as he does not exceed 1800 hours D. He has no monetary incentive to work more than 1200 hours.arrow_forwardPresently, there is a minimum and maximum social security benefit paid to retirees. Between these two bounds, a retiree’s benefit level depends on how much she contributed to the system over her work life. Suppose Social Security was changed so that everyone aged 65 or older was paid $12,000 per year regardless of how much she earned over her working life or whether she continued to work after the age of 65. How would this likely affect hours worked of retirees?arrow_forwardShen, 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 $4/hr, the same wage his brother earns. a. Draw the budget constraint for each twin. Instructions: To earn full credit for this graph you must plot all required points for each curve. 1. Use the line tool (Shen's budget constraint, plot 3 points) to draw the Shen's budget constraint. 2. Use the line tool (Sean's budget constraint, plot 2 points) to draw the Sean's budget constraint. After tax-income ($/day) 98 84 70 56 42 28 14 0 2 4 6 8 10 12 14 16 18 20 22 24 26 Leisure (hrs/day) Tools Shen's…arrow_forward
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