2. (Social Security) (12 points) Payroll fee rate in China is a flat percentage (28%) of an employee's annual gross wage that is between 60% and 300% of local average wage. For workers with wage below 60% of the local average wage, they pay 28% out of 60% of local average wage. For workers with wage above 300% of local average wage, they pay 28% out of 300% of local average wage. The benefit formula is =(regional average monthly wage + individual indexed monthly wage)/2*years of contribution*1%. Assume the number of years of contribution is 30. 1) Draw the fee rate scheme with respect to (w.r.t) wage. 2) Use graph to illustrate how the contribution change with wage. 3) Illustrate the replacement rate scheme w.r.t wage using the graph between benefit and wage. 4) Illustrate the return rate (benefit/contribution) scheme w.r.t wage using the graph between benefit and contribution 2. (Social Security) (12 points) Payroll fee rate in China is a flat percentage (28%) of an employee's annual gross wage that is between 60% and 300% of local average wage. For workers with wage below 60% of the local average wage, they pay 28% out of 60% of local average wage. For workers with wage above 300% of local average wage, they pay 28% out of 300% of local average wage. The benefit formula is =(regional average monthly wage + individual indexed monthly wage)/2*years of contribution*1%. Assume the number of years of contribution is 30. 1) Draw the fee rate scheme with respect to (w.r.t) wage. 2) Use graph to illustrate how the contribution change with wage. 3) Illustrate the replacement rate scheme w.r.t wage using the graph between benefit and wage. 4) Illustrate the return rate (benefit/contribution) scheme w.r.t wage using the graph between benefit and contribution