A Welfare Program Offers Benefit B to Those Not Working

question 34

Multiple Choice

A welfare program offers benefit B to those not working. For those working, it reduces benefit by a dollar for every dollar earned until no benefits are left to be paid. It is found that increasing B results in longer hours of work for those who continue to work. The likely cause of this is

• A) the dollar for dollar reduction in B reduces the increase in income to zero, resulting in an income effect that causes people to work longer hours.
• B) only those with a higher preference for working (flatter utility curves) will continue to work
• C) the increase in B reduces the substitution effect.
• D) the increase in B results in an income and substitution effect on those working that causes them to work longer hours.

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Definitions:

Resistance

Involves the act of opposing or standing against changes, proposals, or efforts, often due to discomfort, fear, or dissatisfaction with new ideas.

Compliance

Following rules, standards, or laws, or the act of adhering to requests or demands from others.

Adherence

The extent to which individuals follow the rules, guidelines, or treatment plans prescribed by authorities or experts, often used in contexts like healthcare, law, and organizational policies.

Commitment

The state or quality of being dedicated to a cause, activity, or goal.