2.Ingrid makes $100/hour for every hour that she works. She can work up to 2,000 hours per year. a. ( 4 points) Draw Ingrid's budget constraint below with hours of leisure on the x- axis and consumption on the y-axis. C $ 200,000 slope = - 70 $ 12,000 (#145, 000 slope =-80 # 24000 "33,000+ slope = # 90 implicit wages : $9, 060 1- #10,000 106 - W = $90 10, 600 -$70, 100 20% - W= $80 1600 1960 2,000 40,000 30%- w=$70 b. (6 points) Assume a tax system has just been implemented where there are three Finding kinks : marginal tax rates; for earnings between $1 and $10,000 the marginal tax rate is 10%, for earnings between $10,000 and $40,000 the marginal tax rate is 20%, and #100 @ $90 /hr for earnings above $40,000 the marginal tax rate is 30%. Now draw Ingrid's new! budget constraint on the original graph. (label carefully the y-intercepts, x- intercepts and the slopes) $30,100 300 hours # 100 @450for c. (6 points) What are the income and substitution effects of the tax in words (I do = 24,600 not want a one word answer; please explain the logic behind the effect). a effect: with the tax. Inand fee