Suppose the government introduces an earned income tax credit (EITC) such that for the first $6,000 in earnings, the government adds $0.50 to the credit for each $1 of earned wages. For the next $3,000 of earnings, the size of the credit is held constant at its cap of $3,000. After that point, the size of the credit is reduced by $0.25 for each $1 of earned wages. When the credit reaches zero, there is no additional EITC.

a. Draw the budget constraint that reflects this EITC structure for a worker who can work up to 2,000 hours per year at a wage of $12 per hour. Be sure to label the budget constraint's endpoints, as well as leisure hours and income at each kink in the budget constraint

b. Suppose an individual works 1,000 hours per year in the absence of the EITC. How will the EITC impact their labor supply? Explain.