Final answer:
James's earnings before taxes are referred to as his gross income. Net income is what remains after taxes. In examples like Jason and Jonathon's, combining work income with government assistance gives a total maximum income, adjusted according to any reductions in benefits.
Step-by-step explanation:
The amount of money that James earns before any taxes are taken out is called his gross income. When you receive a paycheck, the net income is the money you actually take home after all required taxes at the local, state, and federal levels are deducted. For instance, if you earn $1500 every two weeks, but after all the taxes are taken out you receive $1000, that $1000 is your net income.
If Jason works 1,000 hours and earns $4.50 an hour while also receiving $10,000 in government assistance, his total maximum income will be the sum of his work earnings plus the government income, which equals $14,500. In other scenarios, such as Jonathon's, earned income may affect the government benefits received, which can be calculated and represented in a table or on a labor-leisure diagram, taking into account the reduction in government support.