Question 4 Consider the economic situation of Tatum, a single mother with one da

Question

Question 4 Consider the economic situation of Tatum, a single mother with one daughter, Blaire. Tatum is free to work as many hours as she would like at $10/hr. Additionally, should she qualify, Tatum may also collect welfare benets. The welfare system in Tatum's state guarantees her a weekly income of $300 and benets are reduced by one dollar for each dollar Tatum earns in the labor market. Finally, Tatum has been awarded $100/wk in child support by the courts. Tatum lives in a state with a Child Support Assurance Program.

a. What is Tatum's income if she does not participate in the labor force? How much of this income is from child support and how much is from welfare?

b. With the Child Support Assurance Program in eect, how many hours may Tatum work before she no longer qualies for any welfare benets?

c. What is Tatum's total weekly income if she works 35 hrs/wk? How much of this income is from welfare, child support, and labor market earnings?

Explanation / Answer

a) If she works 10/hr

weekly = 10x24x7

=1680

If welfare = 300, she has 1980/week

If other benefit, she has 1980+100= 2080/wk

She has 300/wk from welfare and 100/wk from child support

b) we have as calculation,

2080/ 7=29.7

She has to work for 30 hours / wk

c) 35x2080/7

= 72800/7 = 10400

By,

Nishant Bhatt

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