Question: In California, a svelte= recipient can am $225 per month without having her benefits reduced. Beyond $225, benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can cam $10 pa hour. If she does not work at all, she is eligible for welfare benefits of $645.
a. If she works 10 hours, how much arc ha earnings, how much is her welfare benefit. and how much is her income?
b. After Elizabeth works a contain number of hours, she does not receive any benefit at all. What is that number of hours?
c. Use your answer to parts a and b to plot ha budget constraint.
d. Sketch a set of indifference curves consistent with Elizabeth participating in the labor market.