Analyze the impact of each policy and compare their impact on consumption, labor supply, and welfare of poor households. Assume that home time is a normal good and that its substitution effects are stronger than its income effects.

Suppose that the government implemented a minimum wage that raises wages above those typically received by poor households. Use the time allocation model to...

(i) analyze the total effect of the minimum wage policy on the consumption, labor supply, and welfare of poor households under the assumption that poor households do not choose the corner solutions;

(ii) decompose the effect of the increase in the minimum wage in terms of the substitution and income effect.