Bruce is a single father with 1 child. He can work as a bagger at the local grocery store for $6 per hour up to 1,200 hours per year. He is eligible for welfare, and if he does not earn any income, he will receive $15,000 a year. If Bruce works, the government policy is to deduct 60 cents from his welfare stipend for every $1 that he earns in income. With this policy in place, if Bruce works 600 hours, his income will be

Total Income=$16,440

Explanation:

Number of working hours allowed=1,200 hour per year

Amount paid =$6 per hour

Welfare amount, if Bruce does not work=$15,000

If Bruce works, deduction on 1$=$0.60 or 60 cents

Bruce worked per year=600 hours

Required:

Income of Bruce=?

Solution:

Income from working=600*6

Income from working=$3,600 per year

Amount received from Welfare=$15,000- (3,600*0.60)

Amount received from Welfare=$12,840

Total Income=Income from working+Amount received from Welfare

Total Income=$3,600+$12,840

Total Income=$16,440

reducing the scale of the market for a new product.