Question: The labor/leisure choice model discussed in this chapter presumes that there is just one source of income: labor income. Explain how the graphical model would

The labor/leisure choice model discussed in this chapter presumes that there is just one source of income: labor income. Explain how the graphical model would be altered to include a secondary source of lump-sum income that is unrelated to hours of labor (a cash welfare transfer from the government, for example). Use the model to explain why a cash transfer may cause a disincentive to work.

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