6.3 How could the government set a smaller lumpsum subsidy that would make poor parents as well off as with the hourly child-care subsidy yet cost the government less? Given the tastes shown in the Challenge Solution figure, what would be the effect on the number of hours of child-care service that these parents buy? Are you calculating a compensating variation or an equivalent variation

(given that the original family is initially at e1 in the figure)?