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nata0808 [166]
3 years ago
5

Suppose that there is a welfare program with an income guarantee of $6000 and a benefit reduction rate of 50 percent. In the abs

ence of the program, an individual can work up to 2000 hours per year at an hourly wage of $8 per hour.
A. Draw the person’s budget constraint with the income guarantee.
B. Suppose that the income guarantee rises to $9,000 but with a 75% reduction rate. Draw the new budget constraint.
C. Which of these two income guarantee programs is more likely to discourage work? Explain.
Business
1 answer:
STatiana [176]3 years ago
5 0

Answer:

Draw the person's budget constraint with the income guarantee

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