Consider the following graph that plots the comparative statics of the labor supply decision by utility-maximize: Ruths. Initially, the budget line was given by line segment EF. Suppose that initially, the non-labor incomes such as capital incomes and welfare payments are taxed at a rate 6, and labor incomes are taxed at a rate 7. After a reform in the taxation system, the budget line became EC. The convex curves U0 and U1 are the indjerence curves of Ruth. Assume that leisure is a normal good. Consumption (33) Hours of Leisure 65 70 80 l 10 (a) Did the tax reform change the 6 or 1' or both? In what direction? (2 marks) (b) After the tax reform, did labor supply increase, decrease, or unchanged? Why? (2 marks) (c) If there were only income effects from the tax reform, how would labor supply change? {1 marks]