The government wants to increase hours worked, and so it enacts a law that includes a subsidy on wages. This subsidy is proportional to labor income. Explain why the new budget constraint can be expressed as: Pc = (1 )w(1 l), where is the subsidy (with > 0). Solve for the optimal hours worked and consumption and compare your answer with that of the previous question. What is the eect of this subsidy on hours worked