Question

# 1) John participates in a welfare program which pays him \$6,000 dollars. He can work but...

1) John participates in a welfare program which pays him \$6,000 dollars. He can work but he hose 50 cents of the welfare check for every dollar he earns over \$5,000. How much wage income will he have to earn to escape poverty if the poverty line for him is \$17,000 per year?

A) \$14,000 B) \$17,000 C) \$11,000 D) \$12,000

2) John Doe participates in a welfare program which pays him \$6,000 dollars. He can work but he loses 50 cents of the welfare check for every dollar he earns over \$5,000, if John wants to live on more than \$11,000 per year and he can find a minimum wage job for \$8.00/hour, what is his effective wage that he would consider when deciding whether or not to work?

A) \$0/hr. B) \$4/hr. C) \$8/hr. D) \$17,000 divided by 2000 hours in a year = \$8.5.

1)

Welfare program pays him \$6000

a) If earning 14000 it means 14000-5000=9000 is above \$5000 cap.

He will lose .5 dollar for every dollar earn from paycheck. Hence 9000x0.5=4500 is loss

hence Check he receives = 6000-4500 = \$1500

Total earning = 14000+1500=15500 not enough to escape poverty line

b) Earning 17000 it means above earning \$5000 cap is 17000-5000=12000

losing 0.5 dollar for every dollar hence 12000x0.5=\$6000

paycheck = 6000-6000=\$ 0

Hence Must earn 17000 to escape poverty line

2) Question is not clear post once again

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