A low wage worker (say his hourly wage is $8 an hour, with no other sources of income) finds he is eligible for an earned income tax credit, based on his annual earnings. Say the individual has the usual preferences in consumption and leisure and has say 8400 hours (168 hours per week times 50 weeks) to divide between work and leisure. The EITC has the following characteristics Subsidy rate S = .30 Maximum tax credit $S_0 =4500 Phase out rate tau = .225 The phase out of benefits begins at $20000 of private earnings (A) Graphically illustrate the impact of an earned income tax credit (EITC) on the worker's budget constraint, clearly noting work hours at key nodes (where subsidies stop increasing, where they start decreasing, where they end). A low wage worker (say his hourly wage is $8 an hour, with no other sources of income) finds he is eligible for an earned income tax credit, based on his annual earnings. Say the individual has the usual preferences in consumption and leisure and has say 8400 hours (168 hours per week times 50 weeks) to divide between work and leisure. The EITC has the following characteristics Subsidy rate S = .30 Maximum tax credit $S_0 =4500 Phase out rate tau = .225 The phase out of benefits begins at $20000 of private earnings (A) Graphically illustrate the impact of an earned income tax credit (EITC) on the worker's budget constraint, clearly noting work hours at key nodes (where subsidies stop increasing, where they start decreasing, where they end)