diagram shows. The hope is that this program will provide incentives to work the same or more hours, despite

receiving income assistance. However, it is possible that the recipients will choose a point on the new budget set

like S, with less work, more leisure, and greater income, or a point like R, with the same work and greater income.

Amount Worked (hours) Total Earnings Government Support Total Income

0

500

0

$18,000

$18,000

$4,000

$16,000

$20,000

1,000

$8,000

$14,000

$22,000

1,500

$12,000

$12,000

$24,000

2,000

$16,000

$10,000

$26,000

2,500

$20,000

$8,000

$28,000

TABLE 15.4 The Labor-Leisure Tradeoff with Assistance Reduced by 50 Cents for

Every Dollar Earned

The next module will consider a variety of government support programs focused specifically on people

experiencing poverty, including welfare, SNAP (Supplemental Nutrition Assistance Program), Medicaid, and
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