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?
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?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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?
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