1) Identify the portion(s) of the budget constraint where the labor supply effects of the policy are positive relative to the ‘no policy’ status quo.Group of answer choicesa) D onlyb) C onlyc) A and Bd) A and C 2) Identify the portion(s) of the budget constraint where the labor supply effects of the policy are ambiguous relative to the ‘no policy’ status quo.Group of answer choicesa) A and Bb) C onlyc) D onlyd) B only 3) Identify the portion(s) of the budget constraint where the labor supply effects of the policy are negative relative to the ‘no policy’ status quo.Group of answer choicesa) D onlyb) B onlyc) C onlyd) A and B Scenario 6-3. Suppose that the government introduces an EITC such that for the first $8,000 inearnings, the government pays 50¢ per dollar on wages earned. For the next $3,000 of earnings, thecredit is held constant at $4,000, and after that point, the credit is reduced at a rate of 20¢ per dollarearned. When the credit reaches zero, there is no additional EITC. Furthermore assume a workerwho can work up to 4,000 hours per year at an hourly wage of $10 per hour. Answer the questionsbelow and calculate for the first 800 hours of work.Figure 6-3Consumption$40,000ABC4,000DLeisure (hours)

Earned Income Tax Credit (EITC) is a federal tax credit applied mostly for working people with low…

Scenario 6-3. Suppose that the government introduces an EITC such that for the first $8,000 in earnings, the government pays 50¢ per dollar on wages earned. For the next $3,000 of earnings, the credit is held constant at $4,000, and after that point, the credit is reduced at a rate of 20¢ per dollar earned. When the credit reaches zero, there is no additional EITC. Furthermore assume a worker who can work up to 4,000 hours per year at an hourly wage of $10 per hour. Answer the questions below and calculate for the first 800 hours of work. Figure 6-3 Consumption $40,000 A B C 4,000 D Leisure (hours)

Scenario 6-3. Suppose that the government introduces an EITC such that for the first $8,000 in earnings, the government pays 50¢ per dollar on wages earned. For the next $3,000 of earnings, the credit is held constant at $4,000, and after that point, the credit is reduced at a rate of 20¢ per dollar earned. When the credit reaches zero, there is no additional EITC. Furthermore assume a worker who can work up to 4,000 hours per year at an hourly wage of $10 per hour. Answer the questions below and calculate for the first 800 hours of work. Figure 6-3 Consumption $40,000 A B C 4,000 D Leisure (hours)

Survey of Economics (MindTap Course List)

9th Edition

ISBN:9781305260948

Author:Irvin B. Tucker

Publisher:Irvin B. Tucker

Chapter10: Labor Market And Income Distribution

Section10.8: Discrimination

Problem 1YTE

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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…
Suppose that the government introduces an EITC such that for the first $8,000 in earnings, the government pays 50¢ per dollar on wages earned. For the next $3,000 of earnings, the credit is held constant at $4,000, and after that point, the credit is reduced at a rate of 20¢ per dollar earned. When the credit reaches zero, there is no additional EITC. Furthermore assume a worker who can work up to 4,000 hours per year at an hourly wage of $10 per hour. 1. The benefit of EITC will disappear at how many hours of leisure? (use just numbers) 2. When the EITC disappears how much does the worker get to consume (do not use $ sign)
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Consider an income guarantee program with an income guarantee of $3,000 and a benefit reduction rate of 50%. A person can work up to 2,000 hours per year at $6 per hour. Mia, Lucas, Thomas, and Deborah work for 100, 333 %, 400, and 600 hours, respectively, under this program. The government is considering altering the program to improve work incentives. Its proposal has two pieces. First, it will lower the guarantee to $2.000. Second, it will not reduce benefits for the first $3,000 earned by the workers. After this, it will reduce benefits at a reduction rate of 50%. a. Draw the budget constraint facing any worker under the original program. Explain. b. Draw the budget constraint facing any worker under the proposed new program. Explain. I c. Which of the four workers do you expect to work more under the new program? Who do you expect to work less? Are there any workers for whom vou cannot tell if they will work more or less? Explain.
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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A firm is considering adopting a plan in which it would pay employees less than their MRPL early in their careers and more than their MRPL late in their careers. For a typical worker at the firm MRPL = 10 + 0.1T, where T = the number of years which the worker has been employed at the firm and MRPL is measured in dollars per hour. The worker’s wage per hour is W = 8 + 0.2T. Assume that this wage is high enough to attract workers from alternative jobs, that the discount rate for the firm is zero, and that the expected tenure of a typical worker is 35 years. If workers retire after 35 years, will this plan be profitable for the firm? Explain. For how many years will the firm “underpay” it workers? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.