The faraway land of Ecalpon has a total population of 30,000 families. At the moment, 

• a total of 20,000 families have incomes that are above the country's official poverty line by varying amounts; and 

• each of the other 10,000 families has an income that is below the official "poverty line" by exactly $5,000 per year. 

The country has adopted a proposal to send every family that is below the poverty line an amount of money equal to half the difference between the poverty line and their actual income. An advocate of this plan describes how the cost of this program was calculated: "Each family that is below the poverty line has an income that is exactly $5,000 below the poverty line. So under this program, each family that is below the poverty line will get $5,000 x ½ = $2,500 per family per year. Since there are a total of 10,000 families below the poverty line, the total cost of this program will therefore be 10,000 x $2,500 = $25,000,000 ($25 million). 

A. A critic of this plan argues: "This program will cost substantially more than $25 million." Who's correct - the advocate, or the critic? Explain. 

B. The critic adds: "After this program goes into effect, the number of families with incomes below the official poverty line will be greater than 10,000!" Do you agree, or disagree? Explain.

Answer rating: 100% (QA)

A The critic is correct The program will cost more than 25 million This is because the program will ... View the full answer