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Draw a figure such that a worker with a low wage (wlow ) prefers to live off of welfare (i.e. chooses the new endowment point
Draw a figure such that a worker with a low wage (wlow ) prefers to live off of welfare (i.e. chooses the new endowment point G ), whereas a different worker with the same preferences but a higher wage (whigh) prefers to keep working. Hint: plot the indifference curve which goes exactly through the point G
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