Problem
Under current economic conditions, let's say that an unskilled worker will be able to get a job at a wage of $6 per hour. Now assume the government decides that all people with a weekly income of less than $180 will be given a check from the government to bring them up to the $180 level. Draw one such worker's original budget constraint and the constraint with the welfare program. Will this welfare program be likely to cause a recipient who originally worked 30 hours to work less? How about a recipient who worked less than 30 hours? more than 30 hours? Explain how the government might reduce these negative effects by offering a wage subsidy that would increase the hourly wage to $7 per hour for each of the first 20 hours worked, and draw a revised budget constraint to illustrate.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.