EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 15, Problem 8SP
To determine
Explain which program helps the poor.
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Is work on the part of welfare recipients a
reasonable expectation? Does
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recipients?
How do entitlements differ from welfare?
In social welfare programs, there is no way to change either the benefit reduction rate or the benefit guarantee to simultaneously achieve all three goals of encouraging work, redistributing more income and lowering costs.
What is this dilemma called?
Chapter 15 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- In the government of a country's budget the finance minister proposed to raise the tax on cigarettes. He also proposed to increase income tax on individuals earning more than $100,000 per annum. What possible welfare objective can you think of from these proposals?arrow_forwardWhat makes the Earned Income Tax Credit (EITC) different from other poverty-fighting programs? The amount of the credit is doubled if the head of household is attending college. The tax credit is phased out gradually, rather than at a specific income cutoff point. The amount of the credit is not determined by the number of dependent children in the household. The EITC doesn't require the recipient to pay a minimum amount of income tax in order to receive the credit. It creates less of an incentive to work than other programs.arrow_forwardIn California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor marketarrow_forward
- If the poverty guideline for a family of four is $25,750, what is the most that a household can earn to be considered "near-poor"?arrow_forward1. A government economist, Mollie Orshanky, first calculated this in 1963 by multiplying the cost of a very minimal diet by 3, as a 1955 government study had determined that the typical American family spent 1/3 of its income on food. Group of answer choices a. episodic poverty b. popularity index c. welfare line d. poverty linearrow_forwardSuppose a government program guarantees $ 2,000 a month in income, even for those who do not work at all. However, if the recipient earns income by working, the benefit is reduced by 50 cents for each $1 earned. Which of the following statements is true? This program will redefine the proverty line. While the goal may be to reduce poverty, people rarely respond to incentives. This program will reduce the incentive to work significantly. The goal of this program is to increase the incentive to work, reducing the poverty trap.arrow_forward
- The largest single program in the U.S. welfare state is: a. Food stamp program b. Temporary Aid Needy Families (TANF) c. Earned Income Tax Credit (EITC) d. Social Securityarrow_forwardQuestion 1: Minnesota Governor Tim Walz has hired you to teach him and his staff about Temporary Assistance for Needy Families (TANF). Describe how TANF works and show, using appropriate graphs(s), how TANF would affect families. Discuss how the requirements would affect families' poverty and work. Discuss what the tradeoffs are in using this policy to reduce poverty.arrow_forwardJob training and retraining have long been part of poverty-fighting programs. But do they work?arrow_forward
- What is "Pareto Efficiency"? This is a key concept in welfare economics. Write at least a paragraph to describe this concept and give some examples.arrow_forwardWhat is the relationship between poverty, inequality and social welfare?arrow_forwardWhat is the poverty trap? Group of answer choices A)The situation where government assistance can result in a low or zero net gain for working. B)The situation where a person becomes unemployed and cannot find another job. C)The situation where a person becomes disabled and cannot work. D)The poverty trap occurs when a person is poor, and structural discrimination prevents that person from escaping poverty.arrow_forward
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