3. Consider a parent, with $200 in nonlabor income per week, who can earn $10 per hour working between 0 and 60 hours per week. If this parent decides to work at all, then high-quality day care will cost a fixed $100 per week. a) Draw the budget line for this sparent. snom show glatinilob (A b) Now suppose a welfare program is put in place to subsidize the cost of day care for parents working at least 20 hours per week. Suppose that as long as this parent earns less than $400 (i.e. works less than 40 hours), the full $100 cost is reimbursed. For those earning over $400 per week, the $100 rebate is reduced by $5 for every additional $10 earned (i.e. every additional hour worked), so that it is completely phased out for those earning $600 (i.e. working 60 hours). Draw a diagram that ad reflects the budget line with this new program in place. (Don't worry about being exactly proportional, just capture the main features of the program.)

3. Consider a parent, with $200 in nonlabor income per week, who can earn $10 per hour working between 0 and 60 hours per week. If this parent decides to work at all, then high-quality day care will cost a fixed $100 per week. a) Draw the budget line for this sparent. snom show glatinilob (A b) Now suppose a welfare program is put in place to subsidize the cost of day care for parents working at least 20 hours per week. Suppose that as long as this parent earns less than $400 (i.e. works less than 40 hours), the full $100 cost is reimbursed. For those earning over $400 per week, the $100 rebate is reduced by $5 for every additional $10 earned (i.e. every additional hour worked), so that it is completely phased out for those earning $600 (i.e. working 60 hours). Draw a diagram that ad reflects the budget line with this new program in place. (Don't worry about being exactly proportional, just capture the main features of the program.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3.
Consider a parent, with $200 in nonlabor income per week, who can earn $10
per hour working between 0 and 60 hours per week. If this parent decides to work at all,
then high-quality day care will cost a fixed $100 per week.
a) Draw the budget line for this parent.
som show glatinñob (A
b) Now suppose a welfare program is put in place to subsidize the cost of day care for
parents working at least 20 hours per week. Suppose that as long as this parent earns
less than $400 (i.e. works less than 40 hours), the full $100 cost is reimbursed. For
those earning over $400 per week, the $100 rebate is reduced by $5 for every
additional $10 earned (i.e. every additional hour worked), so that it is completely
phased out for those earning $600 (i.e. working 60 hours). Draw a diagram that d
reflects the budget line with this new program in place. (Don't worry about being
exactly proportional, just capture the main features of the program.)
low
(8

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