In California, a welfare recipient can earn $225 per month without having her benefits reduced. Beyond $225, benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. If she does not work at all, she is eligible for welfare benefits of $645.

A. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income?

B. After Elizabeth works a certain number of hours, she does not receive any benefits at all. What is that number of hours?

C. Use the answer to parts A and B to plot her budget constraint.

D. Sketch a set of indifference curves consistent with Elizabeth's participating in the labor market.