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Figure: Labor Supply and Welfare
-(Figure: Labor Supply and Welfare) Refer to the figure. The presence of the welfare program causes this person to:
A) reduce hours of work from 12 to 0.
B) increase hours of work from 0 to 12.
C) reduce hours of work from 12 to 9.
D) reduce hours of work from 8 to 3.

Question

Use the following to answer questions:
Figure: Labor Supply and Welfare 
-(Figure: Labor Supply and Welfare) Refer to the figure. The presence of the welfare program causes this person to:
A) reduce hours of work from 12 to 0. 
B) increase hours of work from 0 to 12. 
C) reduce hours of work from 12 to 9. 
D) reduce hours of work from 8 to 3.

Quizplus · Accepted Answer

The welfare program provides income support, which can reduce the incentive to work, leading the person to choose not to work at all, reducing hours from 12 to 0.

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