Consider the labor supply of an individual college student. Initially, the student had free room and board due to a scholarship (think of it as non-labor income in the amount Y > 0) which exactly covers room and board). During this time, the student was offered a job at $10/hr, but decided not to work. At the end of the semester, the student's scholarship was mysteriously taken away, leaving the student to pay room and board in the amount of $125/wk. Because the student had no other source of income, the student accepted the old job offer and now worked H* hours per week at $10/hr.

(a) Depict this student's situation graphically before and after the scholarship is taken away.

(b) Explain the income and substitution effects after the scholarship is removed.