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. If Leo earns $150, then he will receive ________ in total benefits from the two programs.

Question

Quizplus · Accepted Answer

For each dollar that he earns, Leo will lose $0.75 from each program, or $1.50 in total. Thus, if he earns $150, he will lose $225 (=$1.50 × $150), so that his total benefits will be $450 - $225 = $225.

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