Yolanda receives a lump sum child support payment of $150 per week. She has 80 hours a week to divide between labor and leisure. She earns $5 an hour. The first $150 per week of her labor income is untaxed, but all labor income that she earns above $150 is taxed at the rate 30%. If we graph her budget line with leisure on the horizontal axis and consumption on the vertical axis, her budget line has

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Yolanda's budget line can be divided into two segments: 
- One segment starts at the point (80, $0) and goes up to the point (50, $750), where she works all 80 hours and earns $750 ($150 child support payment + $600 in labor income). This segment has a slope of -7.5 (derived from her wage rate of $5/hour) and has no kinks. 
- The other segment starts at the point (50, $750) and goes up to the point (0, $150), where she works 0 hours and earns only the $150 child support payment. This segment has a slope of 0 and is a horizontal straight line. 
The kink in the budget line occurs at the point where the two segments meet, which is where she works 50 hours and earns $750 in labor income. At this point, she has reached the untaxed portion of her labor income and any additional labor income would be taxed at a rate of 30%, causing the slope of the budget line to increase from -7.5 to 0. Therefore, choice B is correct.

Yolanda Receives a Lump Sum Child Support Payment of $150