Leo is a welfare recipient who qualifies for two needs-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns,each benefit is reduced by 75 cents until the benefit equals zero.
-Refer to the above information.If Leo values income and not the source of the income,then if he can only earn $400,he will choose to

Question

Quizplus · Accepted Answer

If Leo does not work, he receives a total of $450 from the benefits. If he earns $400, each benefit is reduced by $300 (75% of $400), leaving him with $150 from benefits plus $400 earned, totaling $550. However, since the question asks if he values income and not the source, he would choose not to work and accept the benefits for the maximum guaranteed income without effort.

Leo Is a Welfare Recipient Who Qualifies for Two Needs-Tested