The Affordable Care Act of 2010 provides health insurance subsidies to families with incomes between 134 percent and 400 percent of the federal poverty line. For example, a family of four headed by a 55- year- old earning $ 31,389 ( 134 percent of the federal poverty line) in a high- cost area receives a subsidy of $ 22,740. A similar family earning $ 93,699 (400 percent of the federal poverty line) gets a subsidy of $ 14,799. But a family earning $ 1 more—$ 93,700— gets no subsidy. In a diagram with hours of leisure on the horizontal axis and consumption on the vertical axis, graph a budget constraint that depicts this subsidy scheme. Discuss the labor supply implications.
Answer to relevant QuestionsThe state of Texas recently enacted a $ 5 per-customer tax on strip clubs [Fernandez, 2011]. Discuss the likely incidence of such a tax. Use an appropriate diagram as the basis for your discussion. Suppose that the demand curve for a particular commodity is QD =a- bP , where QD is the quantity demanded, P is the price, and a and b are constants. The supply curve for the commodity is QS =c- dP , where QS is quantity ...Suppose that your neighbor is willing to pay you $ 100 to do some home repairs for her. You would be willing to do the job for $ 80, so you strike a deal. Now suppose that the government levies • Taxes generally impose an ...During the 2012 Republican presidential primary campaign, Senator Rick Santorum proposed cutting the corporate tax rate from 35 percent to zero for manufacturers but only to 17.5 percent for other companies. Use the ...The government provides patents to pharmaceutical companies that allow them to charge high prices for the drugs they develop for some years. If a company succeeds in developing an effective drug, the patent protection can ...
Post your question