1. Briefly describe the time trend of social assistance income (monthly) represented by the black line in Figure 2.
2. Based on the income characteristics of two age groups, 16-24 year-olds and 35-44 year- olds, provided in Table 1, briefly explain whether it is appropriate to use one group as a treatment group and the other one as a control group.
3. Briefly explain why comparing two age groups in proximity to the vertical line (age 30) is appropriate for a natural experiment.
4. Briefly explain through the notion of an opportunity cost why the increase in the generosity of payments is likely to influence employment.

APPENDIX Figure 1: Quebec's relative economic performance 1.15 - RPIT Quebec 1.10 1.05 - 0.95 50 55 60 65 70 75 80 85 90 95 00 05 actual --- predicted -- steady state Legend: The horizontal axis measures Year (e.g., 50 represents the year 1950). The vertical axis measures relative GDP per capita where Canada serves as the benchmark jurisdiction. Each of the three curves represent Quebec's actual, predicted and steady state performance respectively. Source: Coulombe (2000) Figure 2 2000 - 1800 1600- 1400 1200 Social Assistance Income 1000 800 - 600 400 200 Confidence bounds 0+ 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Age (census day) Fig. 6. Social assistance income. Quebec 1986. Source: Lemieux and Milligan (2008)