Final answer:
LIS, or Limited Income Subsidy, relates to government assistance, but the question seems to blend it with other support programs like welfare, SNAP, Medicaid, and EITC. In budget constraints, such as for a person earning $9.00/hour, assistance is reduced as they earn, affecting net income.
Step-by-step explanation:
The term LIS that you mentioned, Limited Income Subsidy, is related to social programs, but apart from that, the question seems to confuse LIS with a variety of other government support programs for low-income individuals. These programs include welfare, SNAP (Supplemental Nutrition Assistance Program), Medicaid, and the earned income tax credit (EITC). When calculating the budget constraint line for an individual, such as Jason who earns $9.00 an hour with a $10,000 guaranteed income floor, the government support is reduced by $0.50 for each $1.00 earned. To compute the intercepts of the budget constraint line considering the maximum of 2,500 hours for work or leisure, you would take the guaranteed income as the vertical intercept (income received without working), and the maximum potential earnings ($9.00 per hour for 2,500 hours) minus any reductions due to earned income affecting assistance to find the horizontal intercept (maximum earnings from work).