1. Define the equity-efficiency tradeoff. How does this central concept in public economics relate to the design of the TANF program?

2welfare reform the name for this reform is the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). This act greatly reduced the size of the TANF program (called "AFDC" at that time) and expanded the size of a different welfare program called the Earned Income Tax Credit (EITC). The EITC consists of a wage *subsidy* for workers with very low income. a. Briefly explain why policymakers might favor providing welfare benefits through a program like the EITC rather than TANF. b. Look up PRWORA and describe two additional ways in which it changed the welfare system that existed prior to 1996 (many answers are possible)