Now Suppose That A Welfare Plan Is Implemented That Gives Kyle 200 Even If He Is

Now suppose that a welfare plan is implemented that gives Kyle $200 even if he is not working at all.This plan allows Kyle to keep the first $100 of earnings he receives from work.For every dollar he makes over $100, his welfare payment is reduced by 50 cents. Hourly wage rate = $10 and T(time) = 60 hours a month. Plot Iiesure on the x axis, Income Y

A. What is the implicit marginal tax rate associated with this plan?

B. At how many hours of work will Kyle’s welfare payment begin to fall?

C. At how many hours of work will Kyle’s welfare payment be 0?

D. Sketch a graph of Kyle’s budget constraint with this welfare plan. In a dotted line also sketch his original budget constraint from number 1.

E. Using indifference curves, show how the introduction of this plan may cause Kyle to reduce the number of hours he works.

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