Leo is a welfare recipient who qualifies for two means-tested cash benefits.If he does not earn any income,he receives $225 from each benefit.For each dollar he earns (which his employer is required to report to the welfare agency),each benefit is reduced by 75 cents until the benefit equals zero.
If Leo values income and not the source of the income,then if he can only earn $400 he will choose to

Question

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If Leo does not work, he receives $450 in total benefits. If he earns $400, his benefits are reduced by $300 (75 cents per dollar earned for each benefit), leaving him with $400 in earnings and $150 in benefits, totaling $550. However, since he values income and not the source, he will choose not to work and accept the benefits, as working does not provide a higher total income than not working.

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