Consider a person who can work up to 80 hours each week at a pre-tax wage of $20 per hour but faces a constant 20% payroll tax. Under these conditions, the worker maximizes her utility by choosing to work 50 hours each week. The government proposes a negative income tax whereby everyone is given $300 each week and anyone can supplement her income further by working. To pay for the negative income tax, the payroll tax rate will be increased to 50%. On a single graph, draw the worker's original budget line and her budget line under the negative income tax. page 75Show that the worker will choose to work fewer hours if the negative income tax is adopted. Will the worker's utility be greater under the negative income tax?

Consider a person who can work up to 80 hours each week at a pre-tax wage of $20 per hour but faces a constant 20% payroll tax. Under these conditions, the worker maximizes her utility by choosing to work 50 hours each week. The government proposes a negative income tax whereby everyone is given $300 each week and anyone can supplement her income further by working. To pay for the negative income tax, the payroll tax rate will be increased to 50%. On a single graph, draw the worker's original budget line and her budget line under the negative income tax. page 75Show that the worker will choose to work fewer hours if the negative income tax is adopted. Will the worker's utility be greater under the negative income tax?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 6SCQ: A group 0f 10 people have the following annual incomes:...

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Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Consider a person who can work up to 80 hours
each week at a pre-tax wage of $20 per hour
but faces a constant 20% payroll tax. Under
these conditions, the worker maximizes her
utility by choosing to work 50 hours each week.
The government proposes a negative income
tax whereby everyone is given $300 each week
and anyone can supplement her income further
by working. To pay for the negative income tax,
the payroll tax rate will be increased to 50%.
On a single graph, draw the worker's original
budget line and her budget line under the
negative income tax.
page 75Show that the worker will choose to
work fewer hours if the negative income tax is
adopted.
Will the worker's utility be greater under the
negative income tax?

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Suppose a single parent can work up to 16 hours per day at a wage rate of$10 per hour. Various income maintenance programs have been developed to assurea minimum level of income for low-income families. Aid to Families withDependent Children (AFDC) was established with the Social SecurityAct of 1935. The family was given an income subsidy depending on family size. Under this program, the family’s benefi t was reduced by $1 forevery dollar earned. Suppose the maximum daily subsidy for the singleparent described in this problem is $40.a. Draw the daily budget constraint without program participation forthe single parent described in this problem.b. On the same graph, draw the daily budget constraint under AFDC forthe single parent described in this problem.c. What effect does this program have on the incentive to work? Explain.
One proposal for reforming the welfare system is to create a negative income tax. Under the negative income tax, each person is entitled to a grant of G dollars permonth. For every dollar the person earns, the grant is reduced by t dollars. a. Suppose G = 200 and t = 0.40. Consider an individual whose hourly wage = $10. There are 30 days in a month, so the total allotment of T = 720. Sketch the budgetconstraint before and after the introduction of the negative income tax. b. Would people work more or less with the implementation of this system? c. What if t = 100%? Explain!
Consider a person who can work up to 80 hours each week at a pretax wage of $20 per hour but faces a constant 20 percent payroll tax. Under these conditions, the worker maximizes her utility by choosing to work 50 hours each week. The government proposes a negative income tax whereby everyone is given $300 each week and anyone can supplement her income further by working. To pay for the negative income tax, the payroll tax rate will be increased to 50 percent.a. On a single graph, draw the worker’s original budget line and her budget line under the negative income tax.b. Show that the worker will choose to work fewer hours if the negative income tax is a dopted.c. Will the worker’s utility be greater under the negative income tax?
SLO-4.1. The amount of money people have to spend after buying necessities such as food, clothing and housing is Osavings Odiscretionary income Onet income Ogross income
The absolute value of the slope of the consumption-leisure budget line is the after-tax wage, w. suppose some workers earn w for up to 40 hours of work each week and then earn 2w for any hours worked thereafter (called overtime). Other workers may earn w for up to 40hours of work each week then only earn .5w thereafter as working more than 40 hours requires getting a second job, which pays an hourly wage less than their primary job. Both types of workers experience a kink in their consumption-leisure budget line. a. Graph in general terms the budget line for each type of worker. b. Which type of worker is likely to work up to the point of the kink, and which type of worker is likely to choose a consumption-leisure bundle far away from the kink?
O A. II, Guaranteed Basic Income OB. IV, Wage Subsidy OC. II, Guaranteed Basic Income O D. II, Earned Income Tax Credit
1. write a short essav tha summarizes the problems by which the official poverty rate is determined.2. Sit down with some classmates and estimate what a family of four (two parents, two voung children) in your area would have to day annually for food. clothing. shelter. energy, and other necessities of lite. What figure do you end up with? How does this sum ot money compare with the official poverty line of 22,213 in 2010 for a family of four?3. Why do you think the maiority of Americans assume poor people lack the motivation To WORK4. Explain to a friend how labor force participation data indicate that it is inaccurate to think that poor people lack the motivation to work.
just subpart d please
ANSWER it correctly and fast. I will rate. Typed answer and very good explanation needed.
Suppose the government implements a negative income tax plan to deal with the poverty problem. The negative income tax rate is set at 30%, and the break-even level of income is set at $20,000. 1. What is the guaranteed annual income level assured each family,. regardless of the amount of income earned by the family? 2. If a family earns $10,000 income, what will their negative income tax subsidy be? 3. If a family earns $30,000 income, what is their disposable income?
What is a "quintile"? Provide and explain one example of how this concept is used in the discussion of income distribution.