As part of Budget 2018, the Government of Canada introduced the Canada Workers Benefit (CWB) that will take affect starting on January 1, 2019. The CWB is a tax credit that supplements the earnings of low-income workers. For a single individual, the structure of the CWB is as follows. No credit for earnings less than or equal to $3,000 A 26% credit on each dollar of income earned over $3,000 up to a maximum of $1,355 The maximum credit is reduced by 12% for each dollar eared above $12,820 Based on these parameters, please answer the following. (a) What is the "phase in" region for the CWB? In other words, what is the income range over which workers receive a CWB subsidy? (6 marks) (b) What is the "break even" level of earnings above which a single worker no longer receives a CWB subsidy? [6 marks] (c) Based on your answers to parts (a) and (b) and the parameters of the CWB, draw a figure showing the budget constraint of a single worker under the CWB. Your figure should clearly label the x-axis, y-axis and the income cutoffs Bo, Bi and B2. [6 marks] (d) In one paragraph or less, explain how the CWB affects the incentive to work for (i) individuals with earnings below Bo, (ii) individuals with earnings between Bo and B1, (iii) individuals with earnings between B and B2, and (iv) individuals with earnings above B2. [7 marks] As part of Budget 2018, the Government of Canada introduced the Canada Workers Benefit (CWB) that will take affect starting on January 1, 2019. The CWB is a tax credit that supplements the earnings of low-income workers. For a single individual, the structure of the CWB is as follows. No credit for earnings less than or equal to $3,000 A 26% credit on each dollar of income earned over $3,000 up to a maximum of $1,355 The maximum credit is reduced by 12% for each dollar eared above $12,820 Based on these parameters, please answer the following. (a) What is the "phase in" region for the CWB? In other words, what is the income range over which workers receive a CWB subsidy? (6 marks) (b) What is the "break even" level of earnings above which a single worker no longer receives a CWB subsidy? [6 marks] (c) Based on your answers to parts (a) and (b) and the parameters of the CWB, draw a figure showing the budget constraint of a single worker under the CWB. Your figure should clearly label the x-axis, y-axis and the income cutoffs Bo, Bi and B2. [6 marks] (d) In one paragraph or less, explain how the CWB affects the incentive to work for (i) individuals with earnings below Bo, (ii) individuals with earnings between Bo and B1, (iii) individuals with earnings between B and B2, and (iv) individuals with earnings above B2. [7 marks]