Suppose that the Government of Ontario considers to adopting one of the following welfare policies based on an ordinaryyearlyincome-leisure choice model.Assume that52 weeksare available in total and wage rate is $400 per week per family.

(1)A lump-sum grant of $5000 per year per family supplied and applying 100% tax rate for every dollar earned.

(2)A lump-sum grant of $4000 per year per family supplied and applying 25% tax rate for every dollar earned.

Identify which of the above policies to increase the work incentive most and least.