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Suppose the government were to provide a $4-per-hour subsidy for families with an employed mother who purchases child care. Using a budget constraint and indifference curve framework, show how this policy might impact the decision of a mother who is not currently employed (be sure to have the number of hours worked before and after the change clearly indicated). In another graph, show how this policy would impact the hours supply decision of a mother of a preschooler who is already working.
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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