A state government wants to provide incentives for single parents to enter the labor market and become

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A state government wants to provide incentives for single parents to enter the labor market and become employed. It is considering a policy of paying single parents of children under age 18 $20 per day if the parent works at least 6 hours a day, 5 days a week. Draw an assumed current daily budget constraint for a single parent and then draw in the constraint that would be created by the $20 subsidy. Discuss the likely effects on

(a) labor force participation and

(b) hours of work.

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