What is the breakeven level of hour of work

Reference no: EM13208685

Assume that a welfare program pays $100 per week if a person does not work and reduces the welfare benefit dollar for dollar with earnings. Assume that the individuals does not have any other nonwage income. ALso assume the individual has a market wage of $5/hour. Assume maximum of 120 hours of leisure per week (T=120/week)?

What is the break-even level of earnings under the program? What is the breakeven level of hour of work under the program?

the equation I have is S=B-tY, where B=basic benefit, t=benefit reduction rate, Y level of earned income?

Reference no: EM13208685

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