Question 4(25 points) Now, consider the following simplified version of the modern type of "welfare to work program", such as the EITC. The individual receives a daily welfare benefit B according to the following for- mula: B = 0.5 x (w x h). In other words, if the individual has no job, he gets a welfare check of 0 dollars/day. If the individual has some labor mar- ket earnings, the benefit is adjusted. For example, if the wage is 10 dollars per hour and the individual works 4 hours, the welfare benefit will be 20 dollars. If the individual works 8 hours a day, then the benefit is 40 dollars. If the individual works 16 hours, then the benefit is 80. Assume that the individual has at most 16 hours to allocate between work and leisure, so Ith = 16. a) Draw the budget constraint of a worker with zero non-labor income and a wage rate of 10 dollars per hour in the absence of the welfare program. b) Draw the budget constraint of a worker with zero non-labor income and a wage rate of 10 dollars per hour in the presence of the welfare program. Note that the amount of consumption feasible for the worker is the sum of his labor market earnings and his welfare transfers. c) Based on the slope of the individual's budget constraint, what is the change on the individual's "effective wage rate" induced by the program?d} What is the change in the individual's non-labor income induced by the program? e) What is the sign of the substitution eect induced by the welfare program? f} What is the sign of the income eect induced by the welfare program? g} Does the program generate an income effect for those that are not participating {h = [I] before the introduction of the welfare program? g} Does the welfare program increase or decrease participation ram