5. Suppose a single parent can work up to 16 hours per day at a wage of $15 / hour. Consider two welfare programs that have been developed for low-income single parents:2 0 Aid for Families with Dependent Children (AFDC): AFDC provides a maximum sub- sidy of $45/ day, and benets are reduced by $1 for every dollar earned. 0 Temporary Assistancefor Needy Families (TANPJ: TANF also provides a maximum sub- sidy of $45/ day, but benefits are reduced by only $0.50 for every dollar earned. (a) Draw the daily budget constraint without any welfare program for the single parent. (b) On the same graph, draw the budget constraint under AFDC for the single parent. (c) On the same graph, draw the budget constraint under TANF for the single parent. At what level of income does the subsidy end? How many hours of work is this? (d) Draw the indifference curve of a single parent who would choose to stay o_ut of the labor force under AFDC, but would be m the labor force under TANF. Relative to ADFC, is the parent's decision to work under TANF driven by the income effect or the substitution effect? (e) Would this single parent work fewer or more hours if there was m welfare policy? Relative to no welfare policy, is the change in the parent's hours of work under TANF driven mainly by the income effect or the substitution effect? (f) Some economists and politicians are concerned that welfare policies reduce incen- tives to work. Briefly explain how TANF can be seen as a "compromise\" relative to AFDC in that it provides welfare but also maintains stronger work incentives