Leo Is a Welfare Recipient Who Qualifies for Two Means-Tested

Multiple Choice

Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency) , his benefit from each program is reduced by 75 cents until the benefit equals zero. Suppose Leo earns $10. He will lose ________ from each benefit, for a total loss of ________.

A) $.75; $1.00
B) $7.50; $7.50
C) $7.50; $15.00
D) $.75; $1.50