Question

$300+$210=$510, Megan would receive a total benefit of $210, and their combined benefit would be $720.

Which of the following yields the greatest combined benefits to Janet and Megan?
(a).When Janet contributes to the building mural and Megan doesn't, or vice versa
(b).When neither Janet nor Megan contributes to the building mural
(c).When both Janet and Megan contribute to the building mural
Now, consider the incentive facing Janet individually. As shown previously, if both Janet and Megan contribute to a public good, Janet receives a benefit of $420. On the other hand, if Megan contributes to the building mural and Janet does not, Janet receives a benefit of $510.

Answer 1

The question discusses the impact of government assistance programs on a single mother's incentive to work, demonstrating that a 1:1 reduction in benefits with earnings could disincentivize work. Additionally, it highlights the role opportunity costs play in the decision-making process surrounding employment versus reliance on government support.

Step-by-step explanation:

The question at hand is regarding public goods, the incentives they create for individuals, and the implication of government support programs for single mothers. We can break down the problem by considering how different government benefits interact with personal earnings—essentially, how different policies affect the labor-leisure trade-off and people's incentives to work. The concept is demonstrated through tables showing potential earnings from work, government support received, and the total income when combining both. It is clear that as earnings from work rise, government support decreases, impacting the individual's total income and subsequently, their willingness to work. This situation reflects the economic principle that when an assistance program reduces benefits one-for-one with income earned, it can serve as a disincentive to work since the marginal benefit of working an additional hour is nullified by the loss in government benefits. To more fully understand the impacts of such programs on work incentives, one must also consider opportunity costs, such as childcare or transportation, which can further influence an individual's decision to work more hours or rely more heavily on government support.In conclusion, assistance programs where benefits decrease at the same rate as income earned can potentially discourage work due to a lack of financial gain and the presence of other opportunity costs. These factors must be carefully balanced to create effective policy.