Final answer:
Susan earns $8 per hour and can work up to 1,800 hours per year, but government benefits reduce by $1 for every $1 earned.
Step-by-step explanation:
To understand how government benefits affect Susan's total income, given her potential earnings from work, we can create a table that outlines various scenarios of her working hours and corresponding earnings. Given that Susan's wage is $8 per hour and she can work a maximum of 1,800 hours per year, her total potential earnings from work would be 1,800 hours multiplied by $8, which equals $14,400. If Susan does not work at all, she is entitled to $16,000 in government benefits. However, for every dollar Susan earns from working, her government support reduces by exactly one dollar.
With these conditions, if Susan were to work full-time at her job, her earnings from work would equal her potential government benefits, and her total income would remain the same regardless of the number of hours she worked, as every dollar earned reduces her government support. This could potentially create a disincentive to work, as working more hours does not increase her overall income due to the reduction in government support.
This phenomenon is sometimes referred to as the "welfare trap" where the structure of government benefits disincentivizes additional work. Besides, opportunity costs such as child care expenses and time away from her children might reduce Susan's incentive to work more hours.