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.
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

When Leo earns less than $300, his total income will fall by 50 cents for each additional dollar earned. This is because each dollar earned causes a reduction of 75 cents in his benefits, but since he is earning less than $300, his benefits have not yet reached zero. Therefore, the reduction in benefits outweighs the increase in earnings, causing his total income to fall by 50 cents for each additional dollar earned.

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