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Marianne is a single mother with 3 children. She can earn $10.50 per hour and can work up to 1,700 hours per year. However, if
Marianne is a single mother with 3 children. She can earn $10.50 per hour and can work up to 1,700 hours per year. However, if she does not earn any income at all, she will receive government benefits totaling $17,850 per year. For every $1 of income she earns, her level of government support is reduced by $1. Marianne's labor-leisure opportunity set has doubled is not affected by the government support program is larger with the government support program is smaller with the government support program
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