Time constraint Q Under a welfare plan, poor people are given a lump-sum payment of $L. If they accept this welfare payment, they must pay a high tax, v=0.5, on anything they earn. If they do not accept the welfare payment, they do not have to pay a tax on their earnings. Show that whether an individual accepts welfare depends on the individual's tastes. The budget constraint with the welfare plan " and the budget constraint without the welfare plan L' are illustrated in the figure to the right. For completing the following, assume the indifference curves satisfy the usual assumptions. 1.) Use the 3-point curved line drawing tool to graph an indifference curve for an individual whose equilibrium consumption bundle includes accepting the welfare plan. Label this curve 'W. 2.) Use the 3-point curved line drawing tool to draw an indifference curve for an individual whose equilibrium consumption bundle does not include accepting the welfare plan. Label this curve '1": Carefully follow the instructions above, and only draw the required objects. Y, Goods per day L, Leisure hours per day All other goods Education vouchers are increasingly used in various parts of the United States. Suppose that the government offers poor people a $5,000 education voucher, which can be used only to pay for education. Doreen would be better off with $5,000 in cash than with the education voucher. In a graph, determine the cash value, V, Doreen places on the education voucher (that is, the amount of cash that would leave her as well off as with the education voucher). Show how much education and all other goods" she would consume with the education voucher or with a cash payment of V. Suppose Doreen's initial budget line is L'. With the education voucher, her budget line becomes L?, which has a kink. 1.) Use the point drawing tool to identify how much education and all other goods Doreen consumes prior to the education voucher. Label this point 'e': 12 2.) Use the point drawing tool to identify how much education and all other goods Doreen consumes with the education voucher. Label this point 'e' Carefully follow the instructions above and only draw the required objects. L2 Q, Units of education Time constraint Q Under a welfare plan, poor people are given a lump-sum payment of $L. If they accept this welfare payment, they must pay a high tax, v=0.5, on anything they earn. If they do not accept the welfare payment, they do not have to pay a tax on their earnings. Show that whether an individual accepts welfare depends on the individual's tastes. The budget constraint with the welfare plan " and the budget constraint without the welfare plan L' are illustrated in the figure to the right. For completing the following, assume the indifference curves satisfy the usual assumptions. 1.) Use the 3-point curved line drawing tool to graph an indifference curve for an individual whose equilibrium consumption bundle includes accepting the welfare plan. Label this curve 'W. 2.) Use the 3-point curved line drawing tool to draw an indifference curve for an individual whose equilibrium consumption bundle does not include accepting the welfare plan. Label this curve '1": Carefully follow the instructions above, and only draw the required objects. Y, Goods per day L, Leisure hours per day All other goods Education vouchers are increasingly used in various parts of the United States. Suppose that the government offers poor people a $5,000 education voucher, which can be used only to pay for education. Doreen would be better off with $5,000 in cash than with the education voucher. In a graph, determine the cash value, V, Doreen places on the education voucher (that is, the amount of cash that would leave her as well off as with the education voucher). Show how much education and all other goods" she would consume with the education voucher or with a cash payment of V. Suppose Doreen's initial budget line is L'. With the education voucher, her budget line becomes L?, which has a kink. 1.) Use the point drawing tool to identify how much education and all other goods Doreen consumes prior to the education voucher. Label this point 'e': 12 2.) Use the point drawing tool to identify how much education and all other goods Doreen consumes with the education voucher. Label this point 'e' Carefully follow the instructions above and only draw the required objects. L2 Q, Units of education