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SebKom SebKom
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6 years ago
The figure above illustrates a "spiked" budget constraint attendant to income replacement programs such as workers' compensation and unemployment insurance. Assume that, prior to injury or unemployment, the worker earns $E0 per time period, works H0 = A - L0 hours, and enjoys utility level U1. In order to minimize the work disincentives associated with income replacement while maintaining the worker near the original level of utility, the program ought to pay a benefit
A) a little bit less than Ag.
B) equal to the original earnings level, E0.
C) greater than AC.
D) a little bit less than AC.
Textbook 
Modern Labor Economics: Theory and Public Policy

Modern Labor Economics: Theory and Public Policy


Edition: 12th
Authors:
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alanialani
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6 years ago
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SebKom Author
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6 years ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
julymontalvo
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Yesterday
Correct Slight Smile TY
djeghri
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2 hours ago
Thanks
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