Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 7

If an income maintenance program entails a $3,000 basic benefit and a benefit reduction rate of.30, what will be the size of the subsidy received by a family that earns $2,000 per year What will be the family's total income What break­even level of income does this program imply