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(b) The government implements a child-care subsidy, structured in the following way. A working parent receives a transfer of exactly $75 per day, if he or she earns $125 or less in labour income. If the working parent earns more than $125 in labour income, the child care subsidy is reduced by $0.50 per dollar earned. Graph Zoe's budget constraint after this policy is enacted (c) Before the child care subsidy was enacted, Zoe optimally chose to work 8 hours per day. How is the child care subsidy likely to affect her labour supply decision? Explain your answer with reference to income and substitution effects. (b) The government implements a child-care subsidy, structured in the following way. A working parent receives a transfer of exactly $75 per day, if he or she earns $125 or less in labour income. If the working parent earns more than $125 in labour income, the child care subsidy is reduced by $0.50 per dollar earned. Graph Zoe's budget constraint after this policy is enacted (c) Before the child care subsidy was enacted, Zoe optimally chose to work 8 hours per day. How is the child care subsidy likely to affect her labour supply decision? Explain your answer with reference to income and substitution effects