Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. When Leo's earnings are less than $300, each extra dollar he earns causes his total income (earnings plus benefits)to:

Question

Quizplus · Accepted Answer

For each dollar he earns, Leo loses $0.75 from each program, so his total income will fall by 50 cents (= $1.00 - (2 × $0.75)).

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