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Instructions: Please use a ruler when you draw the diagrams. 60 50 40 30 20 10 10 20 30 40 50 60 1. In the
Instructions: Please use a ruler when you draw the diagrams. 60 50 40 30 20 10 10 20 30 40 50 60 1. In the chart above, suppose that the person depicted earns $1 for every hours of work. Label the horizontal axis "Earnings in dollars" and the vertical axis "Income in dollars; Subsidy in dollars." Assume no taxes or transfers. Add a 45% line to show all points where income = earnings. b. Now suppose that the government provides a subsidy to the household. Add a thick line that represents a subsidy of $10 for all levels of earnings of $10 or less. C. Use a dashed line to show the post-subsidy income for earnings of $10 or less. d. What dollar amount represents the break-even level of earnings in this example? C. What dollar amount represents the break-even level of income in this example? Define the marginal benefit reduction rate (mbrr) as the absolute value of the change in benefits from a $1 increase in earnings. What is the mber below $10 of earnings? g. Circle the correct answer: Under this program, as a worker moves from earning $10 to earning $11, the mber is (less than 100%; equal to 100%; greater than 100%). h. What would a person choose if she had the choice between earning $10 or $12? Explain. i. What would she choose if she had the choice between earning $10 or $207 Explain. j. What would she choose if she had the choice between earning $10 or $21? Explain
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